Wednesday, October 29, 2008


This Day in the History of Market Corrections

On this day in 1929, Black Tuesday, (following Black Monday and the Black Thursday of the week before) prices of stocks on the New York Stock Exchange fell precipitously for a third day with 13,000,000 shares being traded and the decline of the Dow Jones Industrial Average from the peak in September at just over 381 to the close on this day, at 230, reaching nearly 40%. The market would continue its steady decline to the nadir on July 8, 1932 at just over 41, a three year decline of nearly 89%. Of course, by that time, the world was in a major economic mess called the Great Depression, which was made worse and prolonged here by the ineffectual fiscal leadership first of Republican Herbert Hoover and then of FDR.
Happy days are here again...

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Ineffectual fiscal leadership by FDR? Although unemployment was high, during his his first term it fell from 25% to 14.3% in 1937. The GNP was 34% higher in 1936 than it as in 1932 and 58% higher in 1940.

Ineffectual? No, I'm afraid I can't agree with that characterization.

Pernicious, malevolent, unconstitutional ... all of those I would agree with, but not "ineffectual". (Note that all of those apply not just to FDR, but to Hoover, who started most of the programs that FDR took credit for.)
OK, bad leadership. Ya' happy? T, the Great Depression lasted until the start, for us, of WWII. That's a decade of failing to end it. Comparison between years during the Great Depression is not that helpful--like talking about the lovely elevation of the road to Hell. Thanks for the comments. Readership is up but comments seem to be down.
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