Thursday, September 18, 2008

Crash
Aside

Looking up the 1929 crash I read these cheery words:

It was to take a generation — and a World War — to see any semblance of prosperity return.‘

I wasn’t born then but I remember the effects of the Depression and how one was always reading about some poor man jumping off a building. And sure enough WW2 got people off the dole and into the forces or factories.

Interestingly John Kenneth Galbraith had this to say:

‘It is a myth that the stock market crash of 1929 led to a wave of suicides. Suicides were actually higher when times were good. What did increase was the discovery of embezzlements after the crash because people had embezzled to put the money in the stock market with assurance that their profits would enable them to pay it back. With the crash, there was no money to pay back. And it was a myth that everyone was in the stock market. Only one-and a-half million of 120 million people were active in the stock market.’

I never understood – nor wish to – about bulls and bears, but apparently it isn’t wise to have more than £35,000 in one investment so that with Lloyds and HBOS merging if one had £35,000 in each of them say, one should move one of the £35,000 elsewhere. And – as Captain Manwaring says – we shouldn’t panic. Should things go pear shaped the government guarantees the £35,000 will be safe.

Oddly Northern Rock now seems to be one of the safest places to put one’s money. If you have just made the odd million from selling a house you are going to be busy scattering it hither and yon. The message seems to be – share it around and only play the stock market if you are prepared to lose it. I don’t believe in spreading gloom and am confident the powers that be will learn from 1929 how to avoid the worst happening. If you were born in the thirties tightening one’s belt is a common occurrence. So what’s new? Lionel Wheeler singing below is so evocative of that period.

22 comments:

OldHorsetailSnake said...

Thanks for straightening out my schooling about the suicide rate back then. It made sense to me, but as it turns out, it was nonsense.

Eryl Shields said...

Bulls and bears?

PI said...

Hoss: I had the same schooling.

Eryl: don't ask:)

Z said...

It's that the first £35,000 is guaranteed to be returned in its entirety, after that the next *can't remember how much* is safe up to 90%. My younger son, who is saving hard for a house (he is one of those anxious for prices to drop) has his money in Northern Rock as they pay good interest and the government made unwise promises of a full guarantee without thinking ahead to a similar problem with other institutions.

PI said...

Z: prices are dropping. Our ones going to Oz dropped 400k. So I said to MTL - at least more young people will be able to afford to buy, but he went on about mortgage rates. Any way I hope younger son pulls it off.

lom said...

Soon the only place to put your money will be in a shoe box under the bed, that is of course if you can aford to buy a pair of shoes.

Kim Ayres said...

But what if you only have £2.50 to invest?

OldOldLady Of The Hills said...

It really is a scary time here....And it appears that the Stock Market is in such a mess here because of DEREGULATION....Something the Republicans think is just swell! All the safeguardsthat were put into place after the crash og 1929, have all been 'de-regulated'.....! So, I'm afraid they didn't learn the lesson very well....!
OY!

I never knew that about The Suicides! Very interesting!

Crabtree said...

The prediction dangers of the deregulation and the avidity of firms ...

Très juste ! I have him still in memory !( Memory of reading )

Every disaster " natural " reveal, If need were, the extreme fragility of the popular classes, of whom the life as the survival are devalued.
By making feel guilty at the need his victims .Always thinkers tried to justify the poverty (misery) ...
[ John Kenneth Galbraith ]

Our government are in full cacophony !To the point of offering a tax picnic ?
And however gold supply of the bank of France , goes well ! Really very well !!

Buy jewels to your wives and friends!

The men are going to curse me ,and you Ladies ?

PI said...

lom: my mum used to leave hers in the oven and I once found a couple of thousand stuffed under the sofa cushions.

Kim: I should consult Meg and Rogan and failing that - how's your singing voice?

Naomi: deregulation? So that's what it is. If only the wretched politicians would look to history more they may learn something and we could better sleep in our beds a night. And then there's greed. What a mess!

Crabtree: interestingly in the crash of 1929, so I read - France did rather better. We owed a lot of money to America and Germany owed a lot of money to us - a real muddle.
As for jewelry I told MTL not to buy me anymore but it is a woman's prerogative to change her mind. D'accord?

Kim Ayres said...

My singing voice is appaling, but I play the mandolin

PI said...

Kim: there you go. I'd put a penny/dime in your hat:)

Crabtree said...

For jewels ,You are perfectly right !

( "Buy jewels to your wives and friends!
The men are going to curse me ") a parabola !

Sirs give best yourself these Ladies the merit well .

In my garden flourish of very beautiful flowers ,
But ,It is inside that is the most beautiful !

R. Sherman said...

One hears frequently that "the war" pulled the world out of depression. Alas, that ignores the hidden costs associated with a destroyed Europe and millions of lives. One wonders how things might be different today had the war not occurred.

Cheers.

PI said...

Randall: the costs were appalling. At age nine, I believed what we were told - that we had to go to Poland's aid and if we didn't we would be over-run by Nazi Germany. What do you think?

PI said...

Crabtree: Je dirais mon maris:)

OldOldLady Of The Hills said...

The deregulation came from "GREED"...The Republicans are always complaining about Too Much Governmentr..So, if I am not mistaken...It was Reagan who said something about Government being the problem in regard to Soultions..."Government isn't the solution, Government is the problem", I believe is the quote....And the 'few' make a lot of dough when things get deregulated, as they did.... now, the Government has had to step in and has to bail these company's out.... And it's US the Taxpayers who will be doing the bailing.
It is a terrible mess. And from what I keep hearing, it is just beginning. Isn't that depressing?

Hope you will have a lovely Sunday Pat.

PI said...

Naomi; it is a lovely day today so I must try to spend some time in the garden. Our PM was on TV this am going on about the problem being global - we know that! I wasn't very reassured but we've seen it all before and one can only hope they learn from their mistakes.
I managed to down load Skype today so that should make life a little easier and cheaper;)

AndrewM said...

I think you mean Corporal Jones, not Captain Manwaring.

PI said...

andrewm: same ilk:)

problemchildbride said...

I've read some of the arguments proposing that WWII was not really in our best interests after all. The costs after all were collossal. But, all said, I think Germany had to be stopped. Its land-grab would probably only have expanded and expanded, and the wickedness we now know was done in its name could not be tolerated.

Over here, things are bat-shit crazy in the financial markets. Congress is set to approve a $700 billion bail out for private corporations on Wall Street, and we the unasked taxpayer, get to pay for it.

I do feel that what we are seeing over here are some of the pains associated with the end of empire. The US is in a massive financial hole and our national debt will be doubled by this Wall Street Rescue.

PI said...

Sam: things don't look much better over here but at least they have stopped the short term buying, to stop sharks from cleaning up.