Brian over at Alpha Trends posts this terrific technical chart of the 1929-32 Rallies. These are more than mere bear market rallies — these are Depression Rallies!

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Historical perspective of bear market rallies

29to32percentchart1

Category: Investing, Markets, Technical Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

81 Responses to “Great Depression Rallies”

  1. Richard Russell (Dow Theory Letters): Are we in a bear market rally or a new bull market?
    “(1) The market turned up in a V-shaped reversal off the March 9 low. However, almost all bull markets start with a period of accumulation. This entails a sideways move, sometimes taking weeks or even months. Or it may require a non-confirmation of the Averages as per December 1974. At the March low, we saw neither – no indication of accumulation. And that bothers me.

    “(2) At the March lows, we did not see the ‘great values’ that usually accompany major bear market bottoms (i.e. P/E’s in the 5-8 area, average dividend yields of 5-6%).

    “(3) The market was severely oversold at the March lows, a condition that often sets off a ‘relief’ (‘let off the pressure’) rally. The advance was probably triggered by the severely oversold condition of the market.

    “(4) The one thing a money-manager cannot afford to do is be on the sidelines during ‘what could be’ a major rally. Once the market started up from the March 9 low, many money managers leaped in. The big short positions were immediately squeezed. The rise became a momentum advance. Retail buyers moved in, many trying to retrieve some of their brutal losses.

    “(5) The rally moved up ‘too fast’ – action more typical of a bear market rally than the slow, plodding rise that is characteristic of the advance in a new bull market.

    “(6) Two groups that led the rally were Financials and Consumer Cyclicals. Interestingly, these two groups contained respectively 5 billion and 2.7 billion shares sold short. This suggests strongly that a significant part of the rally was fired up by short-covering in these two groups (thanks Alan Abelson for this information).

    “(7) Many investors and analysts turned optimistic after the market had rallied for only a few weeks. At true bear market bottoms, investors remain stubbornly sceptical or bearish for months after the bottom. Remembering 1974, people were actually angry when I turned bullish at the bottom. I was receiving hate letters and subscription cancellations.

    “All of the above have kept me skeptical and cautious about this rally.”

    Source: Richard Russell, The Dow Theory Letters, April 20, 2009.

  2. Marcus Aurelius says:

    If you match this against our current chart (using highs and lows – as if that means anything), I’d say we’re at the equivalent point of August, 1930.

    Or not.

  3. Chubby Davis says:

    Market closes higher on Swine Flu data.
    Stories that move the market.

  4. Mannwich says:

    Don’t forget 21,000 more GM jobless moving market higher too. Who needs jobs anyway?

  5. Bruce N Tennessee says:

    And who is our third largest trading partner, with twice the trade of number 4, Japan?

    http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States

    And how is their economy doing now?

    http://www.businesstimes.com.sg/sub/latest/story/0,4574,330407,00.html?

    “MEXICO SLOWS TO A HALT

    In Mexico, the centre of the swine flu outbreak, life has slowed dramatically in cities as schools have been closed and public events called off to slow the spread of the virus.

    Many in Mexico City spent the weekend hunkered at home or wore blue surgical face masks handed out by truckloads of soldiers to venture out onto strangely hushed streets. The city government considered halting public transport. ”

    ..May you live in interesting times….

  6. DL says:

    For those who like to consider moving averages, after the Crash of ’29, the Dow remained below its 200 day MA for 26 months (from 6/2/30 to 8/1/32). So, for the present, there may not be a big rush for the SPX to meet up with its 200 DMA.

  7. Super-Anon says:

    Interesting action today – real weakness in some of the garbage. Is this the rollover or another bear trap?

  8. karen says:

    Bear trap, imo. This was good tech analysis: http://www.safehaven.com/article-13199.htm

    Looking at some of the beaten down Mexican ADRs but haven’t bot… CX and AMX, example.

  9. DL says:

    Bear prayer:

    Oh mighty market Gods, look down upon our dry lands and parched earth, and come quickly to save us. Send your clouds of calamity and bad economic news to rain down upon us. Fill us with faith and trust that out of-the-money-put options will not expire worthless, and that ultrashort funds will once again bear bountiful fruit.

  10. Super-Anon says:

    Many investors and analysts turned optimistic after the market had rallied for only a few weeks. At true bear market bottoms, investors remain stubbornly sceptical or bearish for months after the bottom. Remembering 1974, people were actually angry when I turned bullish at the bottom. I was receiving hate letters and subscription cancellations.

    How about when he turned bullish (last year wast it)?

  11. karen says:

    Even Doug Noland is on Reflation Watch now… skip to the end for his commentary.

    http://www.safehaven.com/article-13189.htm

  12. DL says:

    Karen @ 1:06

    I do think we’ll see a trough-to-peak rally in the SPX of 50% (or more) during Obama’s first term. I just think that it’ll start from substantially lower levels than where we are now.

  13. leftback says:

    This looks like the April 1931 rally. 30.8% is about right. Looks the rallies will be very large when we get closer to the bottom. The real bottom, I mean, not the Leftback Bottom™.

    Karen, reflation will depend upon the political will to print and pump even more money into Zombie banks. I suspect that they will do it, but perhaps something bad has to happen again before the motivation is there?

  14. Mannwich says:

    @leftback: Me-thinks that “something” you’re talking about that will motivate more bailouts is another market puking/tantrum to spur the end of the world exclamations if more taxpayer money isn’t thrown at the banks.

  15. leftback says:

    I believe that we will see cycles of “EOTWAWKI” and “green shoots” until we are thoroughly sick of it.

  16. DL says:

    Mannwich @ 1:19

    A nice plunge down to 650 would probably result in more bailouts for the banks.

  17. Mannwich says:

    @DL: Precisely what I’m thinking. What better way to scare the masses again into thinking more bailout money is needed to stave off the apocalypse? If people think things are improving, then they’re less likely to go along with throwing more money at the banks who are “making profits” right now hand over fist and paying out big bonuses in the process.

  18. karen says:

    I accidentally posted this under the wrong header…

    Possible H & S (bearish) on 10 minute charts for $indu, $spx, and $compq… actually, they all look nearly identical.. so bears can still hope : )

  19. DL says:

    karen @ 1:31

    “…so bears can still hope”.

    Gee, thanks.

  20. HCF says:

    I love how the MSM keeps talking about all the money still “on the sideline.” I’m guessing it’s because a +0.05% APY is better than -50% or so… Improving, sustainable economic improvements leads to improving sustainable market conditions, not the other way around! Too bad, policy makers are trying to trick us by doing the opposite.

    HCF

  21. karen says:

    DL, it would take a break of spx 845 for me to even begin to doubt this uptrend.

  22. karen says:

    $tran back below 3000 is bearish; gotta see if 2945ish holds… $wlsh is still bullish.

  23. leftback says:

    HCF: “I love how the MSM keeps talking about all the money still “on the sideline.” ”

    There is also a lot of debt, default, foreclosure and bankruptcy “on the sidelines” as well.
    Real estate from the middle to the upper end is still in La-La land, even if the low end is correcting.

  24. franklin411 says:

    History is not cyclical, and 2009 is not 1929-1933.

  25. Mannwich says:

    @franklin411: I sure hope you don’t scurry away from TBP when this all falls apart in epic fashion.

  26. HCF says:

    @ leftback:

    To add to your point, since we are in a de-leveraging process, the money on the sideline is just the underpinning of all the debt, so it’s more tied up than most people realize. It’s as if the last year was just a ‘blip’ in the road and now, we’ll just continue on the path to prosperity without making any changes. I’m guessing that it’s a 50/50 shot we hit 9,000 on the Dow before we hit 7,000, but I definitely think that we have to see 6,000 before we ever sniff 10k again….

    HCF

  27. harold hecuba says:

    leftback is right

    household debt continues to be in the stratosphere and the deleveraging has barely even started. social mood continues to deteriorate despite the nonsense you hear from gov consumer confidence garbage. savings rate will continue to increase as balance sheet is repaired. this will have an enomrmous impact on an economy that is consumer driven. how the hell was this allowed to happen. exports will save us?LOL fat chance particularly in a global depression. oh we did export worthless mortgage toilet paper around the world which was eagerly gobbled up by idiots around the globe. unemployment will continue to soar and housing will continue to fall those looking for reflation are delusional.

  28. Super-Anon says:

    Karen, reflation will depend upon the political will to print and pump even more money into Zombie banks. I suspect that they will do it, but perhaps something bad has to happen again before the motivation is there?

    Well the simple fact is if our government begins to think they’re in danger of bankruptcy due to falling tax revenues, they’re going to do literally anything to stop that from happening (if their past behavior is any indication).

    Up to this point we have followed the route to destruction that history has said we would without deviation.

    Then next step will be the final and total destruction of the currency and financial system via easy credit and inflation.

    So far we have shown no cognizance of our own flaws as a nation or of our place in history.

    Until there is some sign otherwise, there’s not much reason for optimism.

  29. harold hecuba says:

    but but but but thomas lee from the esteemed JPM calling for s+p 1100 by year end.

  30. DL says:

    franklin411 @ 1:47

    History doesn’t repeat exactly, but it can provide clues about what’s possible.

    You can disregard history if you want, but you’re still left with a descision: buy, or sell?

  31. HCF says:

    @ franklin411:

    Agreed with you that 2009 is different than 1929-1933. However, we do need to realize that there is finite possibility that this situation will prove to be MUCH WORSE than the Great Depression. Somehow, so many people seem to view the GD as a “boundry case” which cannot be exceeded. We may be seeing green shoots, but they might also be very poisonous!

    HCF

  32. franklin411 says:

    @DL:
    So what about President Barack Obama makes you think he’s a modern day Herbert Hoover, who argued that the answer to financial crises was less government help for Americans, less spending by consumers, and high tariffs?

  33. Mannwich says:

    I think it was Mark Twain who said, “history does not repeat itself, but it rhymes”. Exactly HCF. Who’s to say that this might not be worse than the GD? Human nature’s arrogance and delusional infallibility can be breathtaking sometimes.

  34. Mannwich says:

    @franklin411: Who said anything about Obama being a “modern day Hoover?” Just because Obama is doing things differently than Hoover doesn’t mean he’s any more right than Hoover was……

  35. franklin411 says:

    @HCF
    There’s a danger to implying that the Great Depression was inevitable. It was not…it was the result of Herbert Hoover’s poor policy decisions. The irony is that Hoover gets all the blame, but he was only doing what everyone agreed was the correct response to the crisis at the time–cut spending, balance the budget, deflate the bubble by sucking money out of the economy, and let the weak starve to death.

  36. harold hecuba says:

    other than FDIC insurance and unprecedented backstops by a gov that now support 10-11 trillion of a 14 trillion economy (there is no guarantee this will work and if it does the ramifications are HUGE) 2009 and the great depression are very similar. no let me put it this way 2007-present actually looks 10x worse

  37. DL says:

    franklin411 @ 1:55

    I know, I know,

    Democrats: GOOD
    Republicans: BAD.

    What more does an investor need to know?

  38. Mannwich says:

    @DL: That about sums it up in ‘ol franklin’s mind (and too many others in this country on both sides of the political divide, I’m afraid). Get out the pom-poms and cheer your team onto “victory” (whatever that means).

  39. Super-Anon says:

    I know, I know,

    Democrats: GOOD
    Republicans: BAD.

    What more does an investor need to know?

    Just think… all economic problems in history could have been solved by unrestrained borrowing and spending.

    Who could have ever known it was that simple!

  40. franklin411 says:

    @DL:
    Hogwash.

    I said Hoover was doing what everyone said was the right thing to do. He caused the Depression.

    I said Reaganism destroyed America. Clinton bought into Reagan’s free market fundamentalism, but most of you ignored that.

    You got owned.

  41. Super-Anon says:

    So what about President Barack Obama makes you think he’s a modern day Herbert Hoover, who argued that the answer to financial crises was less government help for Americans, less spending by consumers, and high tariffs?

    Out of curiosity, what is your opinion now of places like Greece who’s private sector is being crushed because of excess government debt related to entitlement programs?

  42. franklin411 says:

    @super:
    My answer is to challenge your basic premise, which is that excess government debt is the sole determinant of national economic health. If that was so, then Botswana’s economy would be ripping right now, since their debt as a percentage of GDP is only 5%.

    I don’t see any big rush of people moving from the US to Botswana, do you?

    https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

  43. Mannwich says:

    It’s getting close to pump-prime time in the market. Think I’ll spend it at the gym sweating to the oldies. I’ll watch the absurdity unfold there.

  44. Mannwich says:

    @franklin411: You’re sounding more and more like otto every day. Strange. Maybe you and he were one person after all?

  45. HCF says:

    @franklin411:

    It’s true that the GD may not have been an inevitability. However, the de-leveraging WAS. There was no way to keep that level of debt going forever. Certainly, Hoover did a terrible job and drove us further down, but it is also questionable how well the policies of FDR worked. Certainly, war breaking out in Europe and Asia helped stoke demand for industrial production?

    The point is, it can always be better and it can always be worse. I’m sure if CNBC existed at the onset of the Dark Ages that some pundit would have said, “Now is the time for those generational buys!”

    HCF

  46. [...] This cool chart by Alpha Trends shows the depression rallies that took place between 1929-32. [via Barry Ritholtz] [...]

  47. Todd says:

    I’m just adjusting my trading style as being dictated by the absurdity. We are going through an outlier event and the unknowns are unknown.

    @Mann Franklin is too civil for the Otto comparison. I enjoy is positive outlook, I was that way 10 years ago myself. I still try to put the positive spin on things, just my most positive feeling is that we really go sideways for the next 5 years.

  48. franklin411 says:

    @HCF:
    FDR did a great job, but he wasn’t God. He cut unemployment by 60% from 1933-1939 and doubled the GDP. However, before we criticize FDR too much, we have to remember that he was operating in part on the same economic intelligence as Hoover. FDR wanted to minimize spending and balance the budget as well. Don’t be too hard on FDR–Keynes General Theory wasn’t even written until 1936.

    I agree with you on the overall point, which is that situations are unique and choices matter.

  49. leftback says:

    @franklin411: Please understand this is not really a political forum. Listen to me just once. Things in the world of money and power are much more subtle and devious in the world than your young idealistic mind has grasped.

    Why should you listen? I am a liberal, Bruce is a conservative, BR and Mark could be described as libertarians, to some degree. What most of us share is a preference for sound money policies and a belief in American democracy, over domination by a financial oligarchy that would lead us to become a fascist corporate state if left unchecked.

    I admire President Obama and consider this administration a great step forward. But much power resides in the Treasury where both Paulson and Geithner are the bankers tools. The power of the investment banks must be broken before this country can look to the future. Trust me, some degree of deleveraging and debt repayment has to occur at the corporate and consumer levels, and it will occur despite all the attempts to reflate which will simply succeed in slowing the process. We must return to sound fiscal policy. The alternative is disaster.

  50. cjcpa says:

    I took my daughter to see a production of Annie last year, and there is a scene towards the end where Warbucks takes her on a visit to the president, and she sings a song (I think it is The Sun’ll Come Out Tomorrow). So the cabinet is all taken over with a positive feeling and they decide to fix things, spend money, get the factories working again.
    Nothing to fear but fear itself.
    Optimism conquers, especially from an orphan who can sing.

    How this applies to the current situation, I do not know….
    but Todd’s comment re: Franklin brought this back out of the depths. As if HOPE is all we need.

  51. Mannwich says:

    Thank you, leftback. Excellent summation. You can add me to the mostly “liberal” camp (socially liberally, fiscally conservative), if we must label everything, but getting closer to doubting my belief system more and more each day.

  52. franklin411 says:

    @Mannwich:
    Sometimes, fiscal conservatism *is* social conservatism. No public schools? No opportunity…which is just fine for the wealthy who can afford private schools. No health care? Fine and dandy–it makes employees more compliant because they’re deathly afraid of losing what little medical coverage their employer provides. No reciprocal tariffs with infamous dumping nations like China? Wonderful–the wealthy don’t need to work for a living, and exporting jobs overseas just means that they can buy foreign goods cheaper.

  53. Mannwich says:

    @franklin411: I don’t disagree with much of that (especially the health care piece), but it’s more complicated than that with me. I support much of what Obama is doing, but I have a really bad feeling these bailouts are going to be a disaster for this country and will unravel his whole term in office, including the initiatives that I support.

  54. Super-Anon says:

    Sometimes, fiscal conservatism *is* social conservatism.

    I would argue that if you want a country to be able to afford beneficial social programs then you should be even more concerned with sound fiscal policy.

    The ability to spend on those kinds of programs is going to be proportional to the efficiency and integrity of the rest of the economy and the government I would argue.

    Ask yourself this simple question: Are wasteful, indebted, inefficient companies more or less able to take care of their employees? Is their ability to take care of their employees simply a function of their desire to do so or is the limiting factor the profitability of their main business?

  55. HCF says:

    @ franklin411:

    Fiscal conservatism != social conservatism

    As an example, the Bush 43 administration was clearly not fiscally conservative. Tax cuts were classically conservative, but the way they were implemented came across as crony capitalism (i.e. benefiting the ruling oligarchy). Spending increases and a “deficits don’t matter” clearly is not fiscally consevative!

    The problem so far with the Obama/Geithner plans is that they are pretty much the Bush/Paulson bailout plan! Is this change I can believe in?

    HCF

  56. Mannwich says:

    Over the prior 8 years I was very critical of the “true believers” on the Right who wouldn’t ever say anything negative about “W” (and some still won’t) or any classically right-wing initiatives (tax cuts as the de facto policy response to everything) and vowed that I would not become one of those myself with Obama, so to be intellectually honest, I need to call them like I see them here. The bottom line is he and our other political leaders work for us (novel concept, I know) and I think we all need to think critically instead of just along the “right-left” caricature divide. It’s not the black hats vs. the white hats, or at least it shouldn’t be……

  57. cjcpa says:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=agbKRl8lbr8w&refer=home

    seems important:

    Bair Seeks Power to Shut ‘Systemically’ Key Companies (Update1)

  58. HCF says:

    @cjcpa:

    I’m betting the next headline will be something like

    “FDIC head, SEC head, Fed head, and Treasury head each seek power to shut each other down”

    Sadly, it’s just one giant power grab.

    HCF

  59. cjcpa says:

    In the article, she seems to advocate the same approach for large banks as that for small banks.

    I believe Barry has been advocating this for some time. No special approach.
    Receivership. (not nationalization)
    Same thing — only bigger.

    Many have said FDIC can’t do something that big.
    Head of FDIC seems to have said today: Yes we can.

    (:

  60. jr says:

    franklkin 411 at 1:57:

    “The irony is that Hoover gets all the blame, but he was only doing what everyone agreed was the correct response to the crisis at the time–cut spending, balance the budget, deflate the bubble by sucking money out of the economy, and let the weak starve to death.”
    …..

    Hoover ran deficits and increased spending over his 4 years: 3.6, 4.7, 4.6, 6.5 (in billions). This represented an increase of spending as a percentage of GDP from 4.3% to 10.7% over his 4 years in office, and Hoover did this despite declining tax revenues. Coolidge had a surplus in his last year, Hoover 4 years of deficits.

    Roosevelt’s G spending was not more than 10.7% of GDP until 1941. FDR’s deficits as a percentage of GDP did not exceed the 5.9% of Hoover’s last year in office until 1942.

    http://www.presidency.ucsb.edu/data/budget.php

  61. Super-Anon says:

    As an example, the Bush 43 administration was clearly not fiscally conservative.

    None of the Republicans in the past 30 years have been fiscal conservatives. Reagan was the guy who really ushered in fiscal irresponsibility with his deficits.

    Realistically this country abandoned any concept of fiscal conservatism back in the 1960s.

  62. HCF says:

    @Super-Anon:
    > None of the Republicans in the past 30 years have been fiscal conservatives.

    Fair point! Ironically, the most fiscally conservative president in the recent few decades has been Clinton, who was greatly helped by tax receipts during a bubble-licious era.

    Bush 43 just took everything to a new level thanks to the advice of Dick “deficits don’t matter” Cheney.

    For any of you who haven’t watched “I.O.U.S.A.,” the movie goes over all of this in great detail and the bipartisan nature of the fiscal clusterf*ck we’re in.

    HCF

  63. leftback says:

    Pretty soon Treasury is going to get a phone call from Beijing. Kashkari answers.
    “Hu’s on the phone, Timmy – I mean Secretary Geithner..”
    “Who?”
    “Hu”
    “Who’s on the phone?”
    “Hu’s on the phone”
    “Oh. Hu”.

    “Timmy. You promised, we don’t lose money on your bonds or we blow up your US $. Remember?”
    “Oh, yes, of course, of course, keep the yields low..”.

    “Get me Blankfein on the phone”. “Hello, Lloyd. Things must be bad if you’re answering your own phone”.
    “Never mind that Timmy, what do you want?”
    “Listen, Lloyd, Hu’s just been on the phone and he’s got my balls in a vice”
    “Who?”
    “Hu”
    “Who?”
    “Hu, from China”
    “What the hell did he want?”
    “He wants our yields down, Lloyd. So, we want you to sell the Spoos and buy the Two years. OK?”
    “Get me the trading desk. Sell the SPOOS and buy the TWOS.”

    Of course the report on CNBC will be something about “risk aversion” or “profit taking”….

  64. @Leftback 2:31:

    Put me in the libertarian camp. And that was a good explanation.

    If we could somehow get people to understand that believing in political theologies only enriches the theologians (politicians) and enslaves the parishioners (taxpayers). Take the theological veil from your face, Franklin411, and the world is revealed in all its truth. Some of it is beauty, but quite a bit will be ugly, particularly when you realize you’ve been lied to and manipulated all your life, all so the chief priests of the political ideologies can remain firmly ensconced in power.

  65. HCF says:

    I think regardless of declared political ideology or affiliation, I am finding that many of this board are troubled by many of the similar things:

    1) Too much concentration of power (in both government and large, “too big to fail” companies)
    2) Too much decision making being done by unelected officials (Treasury Secretary, Fed Reserve chairman, etc.)
    3) Lax oversight in the spending of the public’s money

    Unfortunately, all three are secular, rather than cyclical events, so I am not optimistic about the future…

    HCF

  66. [...] The great interest rate rip off Great Depression Rallies | The Big Picture [IMG]file:///C:/DOCUME%7E1/Matt/LOCALS%7E1/Temp/moz-screenshot.jpg[/IMG] [...]

  67. leftback says:

    @HCF.

    Exactly. All three promote looting and corruption and oppose any progressive social or economic agenda.

    @Manny: SRS up 15%…. tide is turning !!!!

  68. Onlooker from Troy says:

    LB @2:31, Mannwich @2:42 and HCF @3:33

    Very good posts. Words out of my own mouth. Well said.

  69. HCF says:

    @ leftback:

    For a declared ‘liberal,’ you make far too much sense… Just kidding =)

    HCF

  70. Onlooker from Troy says:

    “SRS up 15%…. tide is turning !!!!”

    Ya spoke too soon. Here come’s the pump. UFB

  71. leftback says:

    Just a bit of covering at the close there.
    Another profitable day at Schadenfreude Asset Management.

    Case-Shiller tomorrow. Spin that, Lawrence Yun.

  72. DL says:

    leftback @ 3:18

    Funny. But a lot of truth also.

  73. leftback says:

    @DL:

    GS = Government Securities.
    You wanna make a trade? We make it – with TARP money.

    I bet TPTB are really p***ed off now that we are on to them.
    Since MSM is now reading the blogs for ideas, that means pretty soon everyone will be wise to the con.
    I don’t think this charade can go on for much longer. One more bailout and it really will be pitchforks.

  74. hopeImwrong says:

    @Franklin 2:11

    Botswana. Hmmmmm. Do they have internet? Are they owned by bankers yet, or is there still hope? Botswana. That’s the ticket. Thanks.

    Actually, I think I prefer Chile (lower debt as a % of GDP).

  75. willid3 says:

    for all of the gripes about the Federal government’s debt, it pales in comparison to what you and I and the business community owe. and add local government to that and you can see that rest of us owe many times more than what it owes. and their are so many reasons for the GD. among them trying to get back on the gold standard, the fraud that wall street perpetrated on every one else (and each other), the over leveraging by wall street (it almost sounds like wall street was the source of the problem doesn’t it? maybe so).
    and what do we have today? hm, wall street over did that leverage thing again, and probably did that fraud thing too (only it was legal this time!! sort of). and they added a new thing. those global weapons of mass destruction, aka CDS. so we aren’t exactly repeating it. but then we are just at the beginning. we are still waiting on that Pecaro redo. and we can hope we can get one too. the down side to it is, we aren’t in as good a shape as we were. we are (and can’t be) energy self sufficient, and we aren’t the worlds goods supplier.
    while HH may not have been the root cause (some thing still being debated, and probably will be for the next 100 years, unless are mess replaces it), the biggest problem he had was using a hammer when a pile drive was needed. (or taking a kitchen knife to battle with those with tanks)
    the other have of the GD problem is that the public quit taking part in the economy, in part because they were really gloomy. while i suspect that whats behind O’s push, the problem is the public owes top much to get back into the economy again. and they keep watching jobs disappear and thats not helping

  76. willid3 says:

    and i saw a really good explanation for why the B’s administration did what they did last year. one of the big disasters in the GD was the collapse of the banks. well it seems like 4 – 5 banks have about 75+% of the market. so if one of them crashes the repeat of that bank collapse from the GD happens instantly

  77. hopeImwrong says:

    Need more optimists on these boards. I’m getting so pessimistic about the future of the US, I tell myself it just can’t be that bad. I look at the facts, I look at the data, and I just get scared. In my world 1+1=2. I’ve seen reality deviate from this long enough for me to question the math, but it always has come back to 1+1=2 in the end. Even if, on the way to equaling two, it get get far out of whack. I no longer question the math. I just hope I’m wrong.

  78. moneyneversleepsblog says:

    @hopeImwrong

    I agree, the optimists are in short supply which is actually the ONLY real encouraging sign out there. All you can hope for now is the positive black swan theory (see here: http://moneyneversleepsblog.blogspot.com/2009/04/positive-side-of-black-swan.html)

    I assume the same level of fear and negative outlook existed in the 30′s and things did work out (eventually). The worst thing about being negative about the market and the economy is that it still really sucks even if you are dead on…

    The rallies in this bear market have got NOTHING on the depression rallies…

  79. FromLori says:

    China ROLF MAO…

    They are concerned with our spending and the bailouts so they have doubled their Gold. They have good reason to worry they are having problems of their own their bubble will burst and Painfully…

    One more bubble, please.

    After the bubbles in technology, housing, and commodities, we saw the mother of all bubbles: the one in global liquidity. The world economy seemed to require bubbles for its continued functioning.

    I get the distinct feeling that investors’ prayers are now being answered: There’s a new bubble now – or an old one is being re-inflated, depending on your perspective even as I type th

    http://bluelori.blogspot.com/2009/04/rofl-mao.html

  80. CyHastings says:

    WWPD

    What Would Paul Do??

    WTF is Paul Volcker??

    He’s no superhero but at least he is honest….he would bring on the needed pain faster….

    If this bailout madness continues this nation, and the world, will suffer enormously for it.

    I can’t even begin to articulate my disappointment in the Obama administration on the only issue that truly matters right now, which is bringing down these sociopath Wall Street fraudsters Once and For Fucking All.

    He’s dropping the ball completely thus far. I thought he had it in him. So far I was wrong.

  81. [...] the Big Picture.  Re-posting the chart below (click here for larger [...]