Here’s something you probably haven’t yet read: The New York Times article (April 9, 1911) on The Great Panic of 1873, as written by Roger Babson.
Fascinating stuff . . .
>
Source:
Roger W. Babson, the Well Known Statistician, Tells of the Business Epochs That Followed That Period of Depression
The New York Times, April 9, 1911
Download 1873Panic.pdf
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. —John Kenneth Galbraith
Retail Sales in Jan rose .4% headline m/o/m, .7% ex auto's, .6% ex auto's and gasoline and .7% at the core. The headline figure was less than expected while the rest were slightly better. But, with respect to non headline sales, because Dec figures were revised lower, taking the two months together were about in line with forecasts overall. Sales rose in electronics, building materials, food/beverages, clothing, sporting goods, dept stores and restaurant/bars and fell interestingly for online retailers, health/personal care, furniture and motor vehicle/parts. Bottom line, headline sales were below expectations due to the greater than expected fall m/o/m...
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October 27th, 2008 at 12:14 pm
I have read other economic blogs that wrote that the crash of 1873 mirrors the turbulent times we are in now more than the crash of 1929
October 27th, 2008 at 12:29 pm
It started in Vienna and spread to Germany and reached the United States afterwards.
They had no derivatives at the time.
October 27th, 2008 at 12:35 pm
Thank you very much! That is fantastic. A great synopsis of the times.
1873-93 may need to be referenced as much as the 1930s to put our current situation in perspective.
Out where I live Indians ruled the land in 1873. Nearby Tombstone didn’t even exist until an 1877 silver strike got things started. So to realize how developed the financial markets were back then is something I am not always sensitive to.
thanks again.
October 27th, 2008 at 12:35 pm
Just how long has this charade, this ruse leading to wealth for the few over the ruination of lives for the many, been going on, anyway? And haven’t we learned our lesson yet? Are we daft as a species?
October 27th, 2008 at 12:36 pm
It’s interesting that he argues straight out that government attempts to regulate the “natural” cycle of business are foolish and generally make things worse rather than better.
October 27th, 2008 at 12:39 pm
I didn’t read the article yet, and maybe it’s mentioned somewhere in there, but when was this article written?
October 27th, 2008 at 12:40 pm
There’s another article I’d read a week or two ago that made comparisons between now and the what he and others have called “The Real Great Depression (Panic of 1873)”.
http://piggington.com/the_real_great_depression_panic_of_1873
October 27th, 2008 at 12:40 pm
Ah, just saw it:
The New York Times, April 9, 1911
October 27th, 2008 at 1:02 pm
” Are we daft as a species? ”
Tom, we are overrated anyway. We hold our species in much too high a regard….
Just consider the wierd responce from concerned citizen as proof….
October 27th, 2008 at 1:11 pm
Article by Arthur Laffer today. The title and subtitle are the following:
The Age of Prosperity Is Over.
This administration and Congress will be remembered like Herbert Hoover.
http://online.wsj.com/article/SB122506830024970697.html
October 27th, 2008 at 1:14 pm
I liked the use of theword “promptitude”
They just don’t make words like they used to, or in 1873 speak, “The republic’s scrivanators’ scrivanations have declined periously, inopportunatating our hapless widows and orphanatons to a most parsimonious state.”
October 27th, 2008 at 1:19 pm
I’ve always had a gut feeling that the distribution of wealth over the course of human history (and, I suspect, pre-history) has remained largely the same; total wealth distributed over total population of the species has fluctuated within a relatively narrow range, from clan chiefs of cave tribes thru Mesopotamian and Mayan god-kings right down thru Rothschilds, Buffets, Gates, Jamie Dimon, et. al.
Can anyone cite any econometrician who has ever attempted to graph wealth distribution since the “beginning”?
October 27th, 2008 at 1:24 pm
@ConcernedCitizen: You ARE joking, right?
~~~
EDITOR: ConcernedCitizen is a flame baiting, off topic posting troll.
He’s gone
October 27th, 2008 at 1:25 pm
batmando – fascinating question
October 27th, 2008 at 1:30 pm
@DL: Good article, loved this quote…
“If you don’t believe me, just watch how Congress and Barney Frank run the banks. If you thought they did a bad job running the post office, Amtrak, Fannie Mae, Freddie Mac and the military, just wait till you see what they’ll do with Wall Street.”
October 27th, 2008 at 1:36 pm
@DL: In the article, did that charlatan supply-side huckster admit that his little curve is a bunch of crap or just a practical joke?
October 27th, 2008 at 1:42 pm
Seems a lot like karma or the tide or the natural selection of universal balance – you were sitting around the previous 5 years thinking this was too good to be true – now you’ll be sitting around for the next 5 lamenting how it can’t get any worse – then one day 3-4 years from now – EVEN. Like a Seinfeld episode or a trip to Vegas – only its going to last a decade. Just take a look at new car production and sales the last 5 years – reminds me of the RR of the 1870s that went from 7000 miles of new track to 1700 miles. Think auto is ready to lose 75% of its production capabilities?
October 27th, 2008 at 1:44 pm
@ Concerned Citizen
Kevin Phillips relatively recent Wealth and Democracy?
October 27th, 2008 at 1:47 pm
@ConcernedCitizen: I worked on Wall Street and I can unequivocally say that no, most of them are NOT “liberals”. Trust me. The reason NYC is so “liberal” is not due to anything or anyone on Wall Street. Most on Wall St. tend to slant more conservative/pragmatic, meaning they favor anything that makes THEM money. That’s their ideology – MONEY. That’s really it in the end for most of them and most tend to worship the false prophets at the alter of the GOP. It’s a fact.
October 27th, 2008 at 1:53 pm
Yes 1873, the peak of reconstruction before “states rights” started rolling away all the protections for anyone with more than a drop of “non-white” blood. The depression was worked through with new slave labor in the South. In the North we had Carnegie and the strike busting Pinkertons. It was your money or your life and no nonsense. From the state legislators to the president it was all about the railroads. Darwin was getting thrown in the mix to prove that being a predator was the natural and correct way of dealing with things in business or anywhere else. When the NYT wrote about this time in 1911, we had made a heap of progress. In the world’s fair in 1904 they had Pygmies from Africa on display. They kept one of them afterwards in a zoo cage along with an Orangutan monkey. This Pygmy had been in the Bronx Zoo for 7 years by 1911. He still had 5 years of “life” left. Nobody killed him. He was given the best of care in his zoo cage. He committed suicide in 1916. I can’t imagine why. Yeah, we certainly have come a long way. We don’t lynch em’ any more, do we? We just call them Muslims, commies or Socialist.
October 27th, 2008 at 1:55 pm
oh god, back in the day when they paid you by the word…
October 27th, 2008 at 1:56 pm
Oh, Barry. Data schmata, history schmistory. We are Americans, for Pete’s sake. Stock markets around the world might drop precipitously, but the Dow is up 200 today. Stop with all the facts, I am a registered Republican.
On a serious note, I provide everyone a link to the most gratuitous shot of Michelle Caruso-Cabrera’s cleavage ever on CNBC. This is from today and it begins at the 1:57 mark. I think it is stupid in the proudest CNBC traditions, but some of you folks might like it: http://www.cnbc.com/id/15840232?video=906877996&play=1
If you folks like it, would you please consider coming to my site to donate money to my liberal causes. Just click the animated GIF on the right sidebar. Thanks!
October 27th, 2008 at 1:58 pm
seems like liberals aren’t the only ones smoking pot here.
October 27th, 2008 at 2:03 pm
Sound familiar? The same crime is at the scene of every major financial disaster it seems:
Instead, however, of allowing conditions to adjust themselves naturally, the people attempted to bring still greater prosperity by indulging in more unintelligent legislation. Not content with making abnormally large appropriations the Fifty-first Congress began to increase the money in circulation inflate the currency and issue Treasury notes.
October 27th, 2008 at 2:04 pm
Another wonderful rendition of this from a historian. This is Dr. Nelson’s piece, referenced in the piggington.com post above.
http://chronicle.com/temp/reprint.php?id=477k3d8mh2wmtpc4b6h07p4hy9z83x18
I find the societal responses most interesting – violent demonstrations, destruction of railroads (which were the dot coms of the day), anti-Semitic pogroms in Russia.
Who here hasn’t minimally entertained the fanciful thought of turning idiot bankers into lamppost ornaments?
Things are happening in compressed time now, so the time scales are very different than in the 30s. But if things are markedly worse in 4 years, I could see a world where fascism comes to America, “wrapped in the flag and carrying a cross,” as Sinclair would put it.
October 27th, 2008 at 2:13 pm
ConcernedCitizen,
A friend says he keeps his liberal mouth shut at one of the big Wall Street firms — even now amidst all the hypocritical bailouts — for fear of being ostracized. That’s my one anecdote about how “Republican” the environment is.
I’ve seen your good posts before. So, I’m confident you’re not mindlessly channeling right-wing radio. But, I do fear that the “Wall Street liberal” label is going to be heavily marketed on the air — “*successfully*”. From what I see (the anecdote plus the regular business television coverage that CNBCsucks so properly skewers), I think it’s incorrect.
Also, by the way, San Diego tilts to the right, unlike much of the rest of California.
October 27th, 2008 at 2:15 pm
ConcernedCitizen, don’t shoot the messenger and don’t put words into people’s mouths. Learn to take criticism. It’s how we improve — *anything*.
October 27th, 2008 at 2:24 pm
Sounds like some of the Right wing ideologue friends are a tad cranky today. I don’t blame them. If everything I believed in went to shit in a few short months, I’d be cranky too. Wait – I’m STILL cranky and I didn’t any of that Right wing crap.
Bottom line is you should be mad at your own party for screwing everything up royally. They’ve only been running things for the better part of the past 28 years. I guess that’s not enough time or should we just blame Clinton? (Soon, much to Clinton’s relief, we can insert the name “Obama” in Clinton’s place for the next 20-25 years as the mindless-blame-the-liberal-boogeyman game for the Right resumes in full throttle).
October 27th, 2008 at 2:27 pm
Posted by: Philippe | Oct 27, 2008 12:29:26 PM
“It started in Vienna and spread to Germany and reached the United States afterwards.
They had no derivatives at the time.”
might want to read up on the history of finance before you make any bets on “no derivatives at the time.”
October 27th, 2008 at 2:31 pm
I wonder if our ConcernedCitizen has ever been south of the Mason-Dixon line. Folks down here give the Middle Easterners a run for their money with respect to tolerance.
October 27th, 2008 at 2:32 pm
ConcernedCitizen is a flame baiting, off topic posting troll.
He’s gone
October 27th, 2008 at 2:38 pm
Panic is an irrational fear. It is not a panic if one sells because his assets are worthless, or significantly less than the face value, and the economy is in the toilet and, therefore, profits and equities are going down. That is not a panic. Its the realization that you are not as wealthy as you thought and what you own is worth a lot less than you thought.
October 27th, 2008 at 2:38 pm
Hey, ConcernedCitizen. Do you realize how much damage jack-asses like you do to your own cause ? I’m a small business owner, and have been for over a decade and counting. I was previously a Republican until 2002, but am now a proudly registered Democrat. And guess what ? It isn’t because I want the government to provide everything for me, and every time folks like you say something like that you’re insulting the intelligence of over half of the country. Contrary to what you blindly adhere to, there are a lot of innovators, entrepreneurs, and business owners that are also Democrats.
The evidence is overwhelming that the Democrats will do a much better job of improving the economic conditions for my small business than the Republicans. You can try to insult people as much as you want, but it doesn’t work anymore because people actually realize what is at stake right now. There’s a reason that you’re seeing Republicans abandon their party in droves. This isn’t a sporting match like it was in the 90′s, and your failure (and others) to see this will be your downfall. I used to listen to Rush and get a good kick out of beating up on the Clintons and delighting in all of the manufactured controversies about them, but I’ve since grown up. I suggest that you do the same.
October 27th, 2008 at 2:40 pm
My philosophy on political posts:
Always ask yourself before replying – if I respond to this, will it a) make me more attractive to hot girls? or b) make me rich?
If neither a) nor b) are true, I recommend saving the electrons.
Modern American society deals with its wingnuts by giving them a forum to scream harmlessly into the void.
October 27th, 2008 at 2:46 pm
Since ConcernedCitizen is now gone, can anyone else cite any econometrician who has ever attempted to graph wealth distribution since the “beginning”? Did Kevin Phillips indeed make any such citation in Wealth and Democracy?
October 27th, 2008 at 2:54 pm
The solution to our economic problems is intelligent consumption:
1) The US government becomes a broker of stocks.
2) After a course of study and a pass or fail examination, a person is licensed to buy and sell stocks.
3) The US government becomes the clearing house for commodities as well as stock trades.
4) No derivatives and no futures allowed except for commodity owners like farmers and miners who are the producers of a future product from some raw material.
5) No leverage. Al people trading must have an account from which the money is drawn when a trade is made. NO EXCEPTIONS.
Well, do you want stable markets or Vegas get rich quick schemes? Are you feeling lucky today?
October 27th, 2008 at 3:04 pm
They had plenty ‘o derivatives back then.
October 27th, 2008 at 3:04 pm
Analysis below is correct. Indeed market is up.
”
The war on Syria/Iran has started (also means market will be up as this indicates US still has money and defense business is back). details below.
http://www.marketwarnings.com/2008/10/us-attacks-syria-october-26-2008-is.html
October 27th, 2008 at 3:05 pm
@ batmando
Here’s a paper I remember digging up from college that somewhat addresses what you were asking about- it is a history of wages and prices of a basket of goods (in ounces of silver) from a handful of European cities. Pretty interesting.
http://www.econ.ubc.ca/dp9812.pdf
October 27th, 2008 at 3:11 pm
Thank you for posting that BR, that was fascinating stuff. Plus ça change…
October 27th, 2008 at 3:18 pm
Batmando,
Before graphing the “distribution” of “wealth”, you’d need to define those terms carefully.
I’d be suspicious of any such graph, and would look to these definitions for hints that the author was “proving” a preconception.
Speaking of which, I note that the article which is the subject of this post ends with the author suggesting that people need to read his book and the publishings of his office in order to avoid the ravages of the business cycle. That doesn’t make what he has to say any less interesting, only that it’s self-promotional. Not that anyone does that today, mind you.
October 27th, 2008 at 3:32 pm
Yes 1873, the peak of reconstruction before “states rights” started rolling away all the protections for anyone with more than a drop of “non-white” blood.
“Poor economic conditions caused voters to turn against the Republican Party. In the 1874 congressional elections, the Democrats assumed control of the House. Public opinion during the period made it difficult for the Grant Administration to develop a coherent policy regarding the Southern states. The North began to steer away from Reconstruction. As Southern states fell to the Democrats, African Americans found that they could no longer pursue activist policies of reform. Retrenchment was a common response of southern states to state debts during the depression. As funds were cut from state governments, education often suffered, despite being an integral part of blacks’ hopes for social reform. Finally, the election of the Republican candidate, Rutherford B. Hayes, to the Presidency in the disputed election of 1876 led to the end of Reconstruction in March 1877.”
Panic of 1873
Methinks liberals gleefully awaiting their election victory should be a bit more circumspect, and understand that a lot of the stuff on their shopping list is gonna bump up against some pretty big budgetary walls… On the other side, I’m thinking military retrenchment/withdrawal and turbo-BRAC will be the order of the day, time to see if the “efficiencies” promised of newer weapons are true (theoretically a B-2 bomber package can replace X number of conventional bombers plus escort aircraft)..
October 27th, 2008 at 3:38 pm
CNBC Sucks @ 1:56:37 PM
Looks like they’ve raised the ante for FNC.
October 27th, 2008 at 3:41 pm
Sounds like the realintolerant bigots are wherever Mike K. comes from
October 27th, 2008 at 3:43 pm
Of course they didn’t have CNBC in 1873. Or hedge funds.
CNBC Sucks said: “On a serious note, I provide everyone a link to the most gratuitous shot of Michelle Caruso-Cabrera’s cleavage ever on CNBC.”
If I am not mistaken, that shot included gold AND cleavage at the same time, did it not? Good to know that CNBC is upholding its reputation for serious reportage.. Not to be outdone, there was an almost unnecessarily short skirt on Faux Business News (and for me to say that means it was very short). I mean, why not go the whole hog – how long before we have BBN (Bikini Business News) or even LFC (Lingerie Financial Channel)? With the markets going down maybe this is the only way to maintain viewership?
October 27th, 2008 at 3:46 pm
@ Isaac
Thanks for the reference which I’ve only cursorily glanced at and initially wonder whether “divergence in
real incomes” speaks to what I am trying to get at, as Estragon notes re carefully defining “wealth” and “distribution.”
Trying to wrap my head around the equivalency (or not) of
- the clan chief with his right-hand enforcers effectively controlling who gets what part of the kill or the raiding spoils (women, weapons, etc)
- Mesopotamian potentate with his clerk-bureaucracy and generals controlling the granaries and armies
- early banking houses controlling trade and media of exchange, “owning” gov’ts indebted to them
Bottom line(s) who controls how much (as a %)of the resources (or measure thereof) at any point in economic history?
May not be quantifiable as Estragon implies, but as said above, my gut feeling is that the ratios have not varied that greatly over time. With billions on earth today, what is the ratio of the net worth of the top 1% (or even 0.1%) to the other deciles? Maybe the bell curve has flattened out appreciably since Mesopotamia with bulges in the middle coming and going, but I wonder by just how much?
October 27th, 2008 at 3:48 pm
Babson? ROGER W. Babson???
That impudent scallawag corrupted my daughter’s virtue! I’ll see you in hell, Babson!
****************
“History is a nightmare from which I cannot awaken.” -Joyce
October 27th, 2008 at 3:51 pm
@ Estragon
I also wryly noted Babson’s self-promoting, last paragraph and thought of all our dear bloggers today trying to get at the objective truth (sly elbow in the ribs, BR ;^}
October 27th, 2008 at 3:53 pm
friend says he keeps his liberal mouth shut at one of the big Wall Street firms — even now amidst all the hypocritical bailouts — for fear of being
—————-
Even in socialist Canada, you keep your libral mouth shut on Bay Street!
October 27th, 2008 at 3:53 pm
CNBC Sucks @ 1:56:37 PM
A good way for Cramer to boost his ratings: get some of those models from “Deal or no Deal”.
October 27th, 2008 at 4:00 pm
Wow, quite the drop in the final 10-15 minutes. Market saved by the bell. Yikes.
October 27th, 2008 at 4:01 pm
Batmando,
If you haven’t already, I’d suggest reading Jared Diamond’s Guns Germs and Steel. It provides a pretty good overview of the interplay of natural wealth, group size, organizational complexity, migration of people and ideas, and longer term progress.
October 27th, 2008 at 4:02 pm
Looks like the pension funds are once again going to get caught leaning the wrong way:
http://www.reuters.com/article/marketsNews/idINN2731917720081027?rpc=44
October 27th, 2008 at 4:12 pm
@ Jeff M.:
“Wow, quite the drop in the final 10-15 minutes. Market saved by the bell. Yikes.”
Anyone else getting sick of this?
Everytime you think we’re out of the way of more forced selling…
We get the 3:55pm dump.
There is no way on earth that this is “natural” selling.
This is Mutual Fund or Hedge Fund liquidation.
Whether or not its truly a result of Mutual Fund redemptions I dont know. I’d suspect its hedgies based on the sheer magnitude of the lots.
Anyone else have a take?
October 27th, 2008 at 4:16 pm
SIV | Oct 27, 2008 3:41:45 PM
Interesting. So someone is intolerant when they point out others who are intolerant?
October 27th, 2008 at 4:18 pm
@I-Man: Which is precisely the reason why I see no compelling reason to go long here (although I did buy some more McD today at 52+). Obviously that seems to be the prevailing sentiment out there. The slow drip, drip, drip continues.
October 27th, 2008 at 4:20 pm
@ Jeff M: I have done nothing much since last week but I picked up TSO last week, and a small amount of gold stocks. Today I was buying into that late drop to pick up some things of value. Holding TSO, VLO and GDX. A little encouraged by the action in gold today and some selling of Treasuries.
October 27th, 2008 at 4:25 pm
@leftback: Want to buy some more GDX (AUY looks enticing too) but every time I buy, it gets whacked. Want to wait a little before I dive in on Gold again. Also holding ACI and XTO. Have watched them slide, slide, slide. Want to add to those positions at these levels (ACI hit another 52 week low today) but feel I can sleep better at night for now by sticking mostly in short ETF’s like QID, SKF, SRS, EEV and RXD.
October 27th, 2008 at 4:30 pm
@ Jeff M. :
Hey, I’m holding ACI too.
Did you listen in on the call today?
I did. Found it very reassuring. It always helps to hear a CEO of a company say that their stock price is “ridiculous” based on fundamental earnings.
Just listening to the call was enough for me to want to add more to ACI and BNI.
I still cant believe where Arch is trading right now… its truly unbelievable. I thought getting some at $20 was early Christmas for I-Man.
Add in a little of Lefty’s CHK and one could probably make their lifetime fortune by going long ACI and CHK. Its amazing how the fundies get thrown out when the panic’s on. Guess its the same at the top too tho…
October 27th, 2008 at 4:33 pm
Jeez-o, either something blew up that we here in the 9th ring of the concentric circle won’t find out about until tomorrow, or this is just Skynet duking it out over the rubble.
I’m calling around to people maybe in the 5th ring and no one knows anything.
This isn’t really a functioning market so much as it’s a meatgrinder with settlement rules.
I’m always long/short something, between 40/60 and 60/40, never leaning completely one way or another. But, you try to do good money management in this environment, you just get killed for being anything other than 100% short.
October 27th, 2008 at 4:33 pm
a ) The A/D line was negative all day
b ) closing VIX barely moved from Friday’s close
c ) the R2000 index down 4.8%
No reason to be long.
October 27th, 2008 at 4:38 pm
@I-Man: Yep, did listen and am going to be buying more ACI at some point, just not yet. Probably within a few days I’ll start scaling in again. I originally bought pretty high, and bought a bunch more on the way down. Day traded some recently ($20-$26) to pare my position and use for other trades but now want to start buying more seriously. $16+/share looks ridiculously cheap here. How much lower can it go? Wait, don’t answer that, but could it really go in the single digits? How’s that possible?
October 27th, 2008 at 4:43 pm
No reason to be long.
Posted by: DL | Oct 27, 2008 4:33:57 PM
If you’re long something, you’d better have a game plan: a reason to be long and an exit strategy. It also doesn’t hurt to have a long:short pairing (e.g. GDX:QID) as ZackAttack suggests.
I repeat that the $ rally has gone on for a remarkably long time and is now parabolic – it is approaching bubblicious territory. Something is about to change.
October 27th, 2008 at 4:49 pm
@ Lefty:
I agree on the USD…
Throw in the rabble rousing on the yen this morning and I think we might see some of the dollar’s rally begin to fade, as I believe that its really more about the yen.
What I did underestimate was the extent to which the ten year carry trade had inflated equities…
Look at a chart of the cascade in equities of the last three weeks compared to the rally in the yen and it all becomes clear…
But will a stablisation of the yen really stop the unwind? Or just slow its acceleration?
The sheer size of the currency markets intimidates the shit out of me. Maybe I’m starting to buy in a little more to the EOW Posse as the days go on, and as a result, slowly beginning to feel just how screwed we might be.
October 27th, 2008 at 4:58 pm
leftback @ 4:43:52 PM
“Something is about to change”.
I’ll agree with that.
I’m waiting for the “Art Cashin” washout.
October 27th, 2008 at 5:28 pm
Guessing now the Obama assassination plot news might have been the catalyst.
But that was just some skinhead hicks, not a serious plan. “OK, first we rob a gun store…”
October 27th, 2008 at 5:33 pm
I’m calling THE “bottom” when glib d-bag Kneale loses his job at CNBC. Wonder if he’ll say “job cuts are part of the healing process” in the economy when HE loses HIS job? Probably not.
October 27th, 2008 at 5:54 pm
statistically, if you keep on posting different charts of previous bear markets everyday, eventually,you will find one that will be a mirror image.
So if you do find one, it would not be surprising, but the problem is, there will be no statistical significance.
October 27th, 2008 at 6:03 pm
I see we are starting to come to a consensus about the mechanics of the sell off continuing. So just for fun I’ll take a shot at a bottom call. I’ll spend my last two nickels on the long side on the day that GM declares bankruptcy.
October 27th, 2008 at 6:46 pm
There’s no way this is natural selling? Do you get out much, pal?
The fact is the only thing unnatural is our magic mistery call futures and stock buying guardian angels of the PPT. It is a rare time in history when everything should be sold. We are there because of deleveraging. Intrinsic value of stock is an illusion in a highly leveraged atmosphere. Anyone selling puts is going to lose his ass like the 73 dollar BNI puts Buffett is going to wish he never sold. Why is it so hard for some people to see how inflated everyhting is? The guy that started Starbucks coffee is a billionaire who will be worth maybe 10 million within a year. We ran a big pretend. It’s over. Live with it. Buy stocks based on dividends. If you think they can’t continue paying dividends, buy preffered stock (glorified bonds). Boring, I know.
October 27th, 2008 at 6:49 pm
jim,
So how did your “market up because of the bullets fired in Syria” thing go?
Hey, Halliburton is cheap! Buy, buy, buy!
October 27th, 2008 at 7:08 pm
What’s with the ancient history Barry?? Don’t you know we got the Federal Reserve these days?? LoL
October 27th, 2008 at 8:18 pm
Great post fascinating read.
I think it took about 4 years to sort out and it decimated the millionaires nationwide. Especially Real Estate. Like Samuel Walker who was wiped out from around $15 million but others like Levi Leiter (Field’s partner) Retail/Wholesale supplies were immune.
October 27th, 2008 at 9:10 pm
As the article mentioned, the “big men” are always prepared for the depressions. Thats because they create them.
The panic of 1873 was 10 years after the National Banking Act that chartered private banking to issue our currency and loan the government money at interest. This was the 3rd charter in our history, each one issued following a war to handle our debts as a result of these wars.
The first one was the Revolutionary War. The King of England insisted we pay any outstanding debts to their citizens when he dictated the terms of peace in 1783, we pay our debts and in return he was free of any obligation to provide for our security. So we were free so long as we paid tribute per the sections of the Virgina Charter that were not rescinded- such as paying the crown a percentage of the gold, silver and copper we mined.
The second was after the war of 1812 which was due to the fact we were going to let the first charter expire since our debts were paid off. After this war, the 2nd charter was issued.
And of course the Civil war that led to the charter issued with the National Banking Act. The 2nd charter had expired in 1834 (or 1836). Andrew Jackson survived 2 assasination attempts.
The Gold Rush of 1848 meant they needed a way to get their hands on our gold, thus the Civil War was arranged.
The article was written in 1911 following the panic of 1907 when the National Monetary Commission was in the final stages of preparations to sell the Federal Reserve Act (Republicans were not biting so they needed a Democrat who would go along, so they enlisted Teddy Roosevelt to run as an independent splitting the Republican vote in 1912).
JP Morgan who was an agent of the Rothschilds in London created the 1907 panic by spreading rumours of a bank failure and then making loans to save the day. Woodrow Wilson said all would be well if we had more men like JP Morgan.
The Act that passed in 1913 in Woodrow Wilsons first year as President, and was written by the bankers and required an income tax to ensure government would have the money to pay the interest on our debt. The stage was being set for WW I and significant government debt was expected.
And sure enough, the next 30 years led to 2 world wars, enormous debt, and a Great Depression. The citizens gold was confiscated (the big bankers knowing what was coming shipped theirs off to London and Germany), farmers lost their land to the bankers. Income taxes were raised significantly from almost nothing in 1913. Prohibition was passed since government had another source of revenue and they wanted to protect Big Oil since agricultural alcohol was the preferred fuel for automobile engines. The bankers wanted to take over the farms which they were able to do when farmers could no longer sell their corn for drinking alcohol.
When people start talking about nationalizing the Fed and having government issue it’s currency without borrowing it or taxing it, then and only then will manufactured crisis such as these end. So long as we let the private banking elite control our domestic and global economic system the madness will continue.
October 27th, 2008 at 9:19 pm
leftback: “I mean, why not go the whole hog – how long before we have BBN (Bikini Business News) or even LFC (Lingerie Financial Channel)? With the markets going down maybe this is the only way to maintain viewership?”
You are out of touch:
http://nakednews.com
October 27th, 2008 at 9:33 pm
Posted by: pft | Oct 27, 2008 9:10:12 PM
contra to the others, above, “You mean there was a Stock Market in 1911?”, “Wow, you’re tellin’ me ‘Newspapers’ existed way back then?”, “So, said ‘Newspapers’, they must be kept under lock & key, Right?”–way to understand what History really is.
The word history comes from Greek ἱστορία (historia), from the Proto-Indo-European *wid-tor-, from the root *weid-, “to know, to see”.[2] This root is also present in the English words wit, wise, wisdom, vision, and idea, in the Sanskrit word veda,[3] and in the Slavic word videti and vedati, as well as others.[citation needed] (The asterisk before a word indicates that it is a hypothetical construction, not an attested form.).
The Ancient Greek word ἱστορία, historía, means “inquiry, knowledge acquired by investigation”. It was in that sense that Aristotle used the word in his Περί Τά Ζωα Ιστορία, Peri Ta Zoa Istória or, in Latinized form, Historia Animalium.[4] The term is derived from ἵστωρ, hístōr meaning wise man, witness, or judge. We can see early attestations of ἵστωρ in Homeric Hymns, Heraclitus, the Athenian ephebes’ oath, and in Boiotic inscriptions (in a legal sense, either “judge” or “witness,” or similar). The spirant is problematic, and not present in cognate Greek eídomai (“to appear”). The form historeîn, “to inquire”, is an Ionic derivation, which spread first in Classical Greece and ultimately over all of Hellenistic civilization.
It was still in the Greek sense that Francis Bacon used the term in the late 16th century, when he wrote about “Natural History”. For him, historia was “the knowledge of objects determined by space and time”, that sort of knowledge provided by memory (while science was provided by reason, and poetry was provided by fantasy).
The word entered the English language in 1390 with the meaning of “relation of incidents, story”. In Middle English, the meaning was “story” in general. The restriction to the meaning “record of past events” arises in the late 15th century. In German, French, and most Germanic and Romance languages, the same word is still used to mean both “history” and “story”. The adjective historical is attested from 1661, and historic from 1669.[5]
Historian in the sense of a “researcher of history” is attested from 1531. In all European languages, the substantive “history” is still used to mean both “what happened with men”, and “the scholarly study of the happened”, the latter sense sometimes distinguished with a capital letter, “History”, or the word historiography.[4]
http://en.wikipedia.org/wiki/History
October 28th, 2008 at 10:24 am
The panic of 1873 was that the one when Jay Cooke and Co failed?
October 28th, 2008 at 1:11 pm
John(2)
Yes.
see:
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=jay+cooke+panic+of+1873