The Great Crash

I decided to re-read Kenneth Galbraith's, 1929: The Great Crash, this weekend as I was starting to feel generally bullish on the market.

Here is an excerpt I thought I would pass along, my inclination is that you should be able to draw some parallels from this book...

"On Thursday October 31, 1929 well over seven million shares were traded*, and the market made another good gain. The Federal Reserve lowered the rediscount rate from 6 to 5 percent. The reserve banks also launched vigorous open-market purchases of bonds to ease and liberalize the supply of credit"

*New record at the time.

"As Goldman Sachs had done - In the last analysis, support of the stock of one's own company still seemed bold, imaginative and effective of course. Indeed, it seemed the only alternative to slow but certain death."

In summary, this book has great quotes, from all the figureheads of the time. Shows the framework between political figures (Hoover) - the bankers (Morgan) - the academics (Fisher) - the media - and the average investor in the Financial Markets. In retrospect I don't believe much has changed.

Anyone notice how they Greenspan can't be found quotes in any US Financial Publications anymore? You have to venture off to British publications.....In the Financial Times he said, "things will not improve until the housing market turns around"....I believe there is some great validity in that.

I'm keeping my own accounts in cash/shorts. I'm going to miss many of these decisive upward moves. But I still won't be able to bring myself to hold long overnight, only day trades.

Here is a chart of the pompous prognosticators, or our modern day talking heads, like Jim Carmer, on CNBC:

http://www.gold-eagle.com/editorials_01/seymour062001.html