Dow Jones 2009 as a Sucker's Rally: The Historical Comparison with 1930

At the Business Insider, Henry Blodget presents a slide show of New York Times stories from the era comparing the 1930 stock market rally to 2009's, with skin-shivering results.

My favorite quote, from March 25, 1930: "Wall Street was in a cheerful frame of mind as a result of numerous vague reports of improvement in business and industry, but the strength in stocks was generally ascribed to the more aggressive activity of professional interests committed to the advance."

Tim Cavanaugh blogged the other day on the rip-roaringly wonderful economic indicators of 2009, when the dollar refused to either rise up and dance or lay down and die, and which will be in snarky chip implant commentary circa 2080 either the first year of the great Obama recovery or year two of Great Depression II, which was of course George W. Bush's fault.

By the by, on April 17, 1930, the Dow hit a high it would not see again until July…1954. Remember: Past guarantees are no promise of future performance, or something like that, and hold tight to your assets, boys, the Dow will rise again! Sometime.

Comments

[?]

My favorite quote,

Because you can't imagine any of the illiterate stooges who launder press releases today writing anything that looks like it passed through a mind somewhere on its way to the page?

Please?

[John]

"Tim Cavanaugh blogged the other day on the rip-roaringly wonderful economic indicators of 2009, when the dollar refused to either rise up and dance or lay down and die, and which will be in snarky chip implant commentary circa 2080 either the first year of the great Obama recovery or year two of Great Depression II, which was of course George W. Bush's fault."

Don't bet on it Tim. People have short memories. I think Obama is going to take the rap for this. All those liberals thinking it was 1932 all over again may have been off by four years. Perhaps it was 1928 and Obama was Hoover.

[Craig]

No one should get too excited about the Dow hitting 9600 or whatever. It was at 11,000 nine years ago. You would have done better buying CDs at 3 or 4 percent.

And keep in mind for every 50 percent drop in stocks, you need a 100 percent gain to make up your losses.

[Tim Cavanaugh]

Because, I'm never less than fair: Retail sales increased slightly month to month, driven by automotive. Bernanke has landed his helicopter on the deck of the U.S.S. Abraham Lincoln to give a speech in front of a Recession Is Over banner. Also when I referred to the dollar "dropping like Trevor Berbick" in the previous post, I was unaware that Berbick died tragically a few years ago. I was referring only to his getting knocked out by Mike Tyson and meant no other disrespect.

[Space Fiend]

For a finance class this semester, I have to invest $5M (fake money). I'm judged against performance of the S&P500 - which makes it basically impossible. It's increasingly obvious that the fundamentals are, if anything, more unsound than a year ago, yet there is also nothing to indicate this irrational rally won't continue well past finals time. Sigh.

[Tim Cavanaugh]

Read your history of Octobers, Space Fiend. You're gonna get a gut-A in that class.

[Dello]

I predict that the DOW will hang on to 10,000, and by the end of the year. That's when the free fall will begin. With the fresh numbers coming in about poor holiday sales, seasonal (and more) layoffs already begun, and tax time just around the corner, it will be a perfect storm.

[Tim Cavanaugh]

It will be the crack cocaine of perfect storms on steroids.

[ed]

I predict that the DOW will...

If "the Dow" could truly and consistently be "predicted", we'd all be millionaires, wouldn't we.

[Russ 2000]

For a finance class this semester, I have to invest $5M (fake money). I'm judged against performance of the S&P500 - which makes it basically impossible.

Sounds an awful lot like a bible story. I think there was a bailout in that one, too.

[Russ 2000]

For a finance class this semester,

And we wonder why so many people are only short-term thinkers. The education racket has it juiced in.

[Gilbert Martin]

I think at least part of the recent move up in the market is due to a perception by investors that the Obama socialism express is starting to run off the tracks and the resultant economic ruination that they would entail is no longer looking quite as inevitable as previously estimated.

[Johnny Longtorso]

For a finance class this semester, I have to invest $5M (fake money). I'm judged against performance of the S&P500 - which makes it basically impossible.

Since this is all fake, can you ignore the shortages and buy 9mm ammo?

[Silentz]

Space Fiend, there's an investing corollary that states, "The market can stay irrational longer than you can stay solvent."