Watch Out - Even This Rally Parallels The Great Depression

Yahoo ^ | August 5, 2009 | Simon Maierhofer

[george76]

It's been said that history does not always repeat itself, but it does rhyme. It's also been said that those who don't learn from history are doomed to repeat it.

How is this for historic irony, the first leg of the Great Depression reduced the Dow Jones ... by 48%. The subsequent rally lifted the Dow by over 40%.

Fast forward and you will find that the first leg of this recession melted the Dow Jones ... S&P 500 ... and Nasdaq ... by just over 50%, while the rally from the March lows - reminiscent of the 1930s rally - also propelled a 40%+ rise in the major benchmarks.

For those hoping that the parallels end there, I'd like to quote Billy Mays, 'But wait, there's more!'

Easy money, used first for real estate and then for stock market speculations, was the pump that fed the great bubbles leading up to the 1920's crash and ...

The great real estate boom of the 1920s, topped in 1926 three years before stocks. Even back then, new and exotic product structures allowed investors to leverage their real estate investments in never before seen fashion. Florida was the hot bed back then and is so today...a southwest Florida condominium high-rise has 32 stories, but just 1 tenant.

Don't look, but the economy is deteriorating.

Every single sector of the real economy is deteriorating, whether it is unemployment, production, corporate profits, real estate, credit defaults, federal deficits, or construction. The discrepancy between fact and fiction...

But wait - there is more.

Another identifying mark of a depression is deflation.

Savvy investors do not have to fall victim to a false sense of security. Don't become another casualty of 'those who don't learn from history and are doomed to repeat it.'

[george76]

[screaminsunshine]

At least it is buying time for those who are aware of what is coming to stock up and prepare for survival in the new Dark Age of Obamanomics.

[andy58-in-nh]

I figure there’s another two to three weeks of runtime left for the current rally, before reality starts to eat away at the corners of the lovely, but phony picture Wall Street has hung above our mantle.

[pburgh01]

Alot of economists not drinking Obama cool-aid are warning of a coming HARUMPH, possible in 2010. The fundamentals are all there, an inflated currency, rising energy prices and an activist government with policies hostile to the capitalists system. We could see according to some experts...a Dow in the 2500-3000 range and inflation at 10-15%, talking 4 dollar a loaf a bread and 6 bucks a gallon gas and unemployment oh boy don;t want to know. But folks this is what Obama wanted, he cares not about the economy, he is here to wreck it and install himself as Fuhrer to protect the “Working families”.

[AngelesCrestHighway]

How to ruin the American Economy the Obama Way......

[agere_contra]

I’ve seen a theory that the dollar is about to bounce up a bit from its weakened state, potentially triggering the share crash. If this happens it will be next week.

If not then the crash will be in - pure guess - September.

It will look like a short-term reversal at first, and will be described as such. But as the only good news on the horizon for businesses is the 2010 elections, and there’s plenty of bad news - including the Bush tax cuts disappearing - I expect we’ll spend 18 months underwater.

[kingpins10]

Sucker rally. Great time to short.

[XLSweetTea]

back when this all started a few friends and i were discussing the strong parallells to the depression. We all outlined what would probably happen in the next year. So far we’ve been right. Our outline ended with a very long collapse. I believe we are nearing that point now, a little sooner than we expected but arriving nonetheless.

I think a lot of people in washington actually understood what was happening and that is why Bush even agreed to push thru the humungus stimulus so quick. Many economist say if they had done that during the depression things wouldn’t have collapsed. Looks like we’re going to find out if their theory was correct. Wish they’d have been the ones to try it instead of us... the “m”ESSIAH’s sure not helping with new testament of communism.

[Oatka]

back when this all started a few friends and i were discussing the strong parallells to the depression.

Yeah, there's so many that it's spooky. Truly, "those who don't learn from history . . ."

What hit me today was the many TownHall posts from St. Louis, et al. where the Obama/Union goons are disrupting and fighting the grassroots folk. Back in the '30s it was grassroots workers and organizers fighting managements' goons.

As one guy said, "If history doesn't repeat itself, it sure echoes a lot." I too believe this country is going through a watershed in history and that we have some long dark years ahead of us.

[Tawiskaro]

[campaignPete R-CT]

1929 ping

[SunkenCiv]