Parallels between now and 1929 are scary...

1% of population controlled 90% of wealth like now.
Debt was insane, especially household debt like now.
There was a roaring RE market prior to depression, like now.
There was a lack of liquidity that caused meltdown, like now.
There was rampant unemployment...this is coming as mortgage companies, real estate, stock market etc lay off millions. Retail sector is going to get killed.

The dispersion of wealth is messed up like now.

There is a possible depression coming. The FED must lower rates and FAST. I mean 2 fast 1% drops.

 

These are the kind of posts that make me laugh.

 

And you want a job as a trader if i remember correctly you sound like a loony

 

Actually the situation is a lot closer to 1987 than 1929 though I stress I doubt we will have a proper crash just some more steam venting.

 

He sounds like he belongs on Kitco.com with all the other tin foil hat wearing folks.

 

That is the best you can do to rebutt my stats?

 

I was in the UK when the housing market crahed in the early nineties, In a FX dealing room in 94 and in Asia in the 97 crash and the 99 crash. I think the comparison with 1929 is correct. If you don't think so, go right ahead and fill your boots.


There are obviously opportunities caused by liquidity selling and funds dumping anything in an affected sector such as homebuilders to avoid having the names appear in reports to their investors, but I suggest you take a chart of Bethlehem Steel 1929-32, Nikkei 1989 to low, Asian markets 97 to low and Nasdaq 2000 to low and see how many apparent bottoms failed. This one may prove to eclipse 1929.

Don't agree Fed should lower rates - Greenspan lowering rates when he should have cut in '99 got us into this mess now. Wild card to above is that inflation may emerge so strongly that the market could recover surprisingly quickly vs broader economy.

 

All the above won't happen precisely because the fed can reflate the economy by lowering interest rates. But I agree that the potential for a great depression type scenario exists because of the huge amount of debt outstanding and our dependence on even more debt to grow further.

 

Japanese rates went to zero without reflation. Granted they were not allowing clearing to take place, but will the US? Too many rich people with money in hedge funds, too many not rich people overleveraged in their first home.

 

More like 1907 Banker's Panic. It was the impetus to create the federal reserve a decade later. Maybe some day they'll call this the 2007 HF Panic.