1929 Redux: Ben Battles the Bear

Look at this chart by Mark Lundeen. It compares the 1929 “bear” depression with what’s happening NOW. He synchronized the market tops for both events.

1929 vs 2007

Pithy comments from Mr. Lundeen:

This bear is the most volatile market in the 124 year history of the DJIA.

So why isn’t the DJIA below the 1929/32 bear’s valuation at this same point in time? Well, remember Federal Reserve Chairman Bernanke a few months ago kept mentioning all the new tools he had, tools that were not available to “policy makers” in 1929? Funny how quiet he is about his new monkey wrenches as the DJIA keeps dipping below its 8000 line, again and again.

If you and I are puzzled about the lack of a good dead-cat bounce in the DJIA, think how bewildered Bernanke is! He was the acknowledged big-shot expert on the Great Depression bear market.

For years he bragged that he hoped to get a chance at a nasty stock market bear, a real rip-snorter of a bear market. All he needed, he would tell the guys in the FOMC room after few drinks, were some new tools to leverage his genius, and market forces would “cry uncle” PDQ. But that was then, and this is now.

So day after day, Ben goes down in the basement of the Federal Reserved. People walking the hallways of the Fed can hear him pounding all day and long into the night on the pipes of monetary policy. But he is finding out that the damn bear is just too stupid to know when to quit! Poor Benny. [more]


One Response

  1. Bad news: we’re back to 1931. Good news: it’s not 1933 yet

    So we have 2 more years? Not in this case. We have less of a time frame due to the massive derivatives beastie that was not omnipresent in 1931. Having this ‘monkey on our backs’ means we have half or less of that time. Say, 6 months to a year. I’m being optimistic of course.


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