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The Next Big Crash: How It Will Probably Happen
#1
I've been doing a great deal of thinking about the impending Crash, how it will affect the US, the rest of the world, and what it will mean further down the road.

And here is what I believe will definitely occur.

First, this crash will be a continual slide, just as actually happened in 1929. That's right, the 1929 Crash, was more than a crash: it was a slide into oblivion. And all as a result of FEAR, not greed: FEAR. You got that Bill?! FEAR!

Second, there will be no escaping the results of what has been happening for decades, and in hyper-drive for the last decade and a half. Yes Virginia, there is no such thing as getting something for nothing, or living beyond one's means. It all eventually comes due, like it or not.

Third, the Keynesian Superstition will finally be put to ground, as it deserves. Those who have been promoting it the most will suffer the most. Classical Economics will again be the norm, even if it will take some time.

Fourth, Progressivism will not die peacefully. It will go down kicking and screaming, but it will not be able to pass the responsibility to others. In fact, all sects of Collectivism will be taking a huge hit here, as it rightfully deserves.

Fifth, finally the nation will be blessed with a REAL second party, out of sheer necessity. Both wings of the Big Government Party will be the biggest loser from all this, and one of these wings will finally die as both deserve. And like the anti-slavery Republican Party, it will dominate politics for decades. If not, we are really in Deep Shit!

Sixth, the Dollar will no longer be king of the world currency markets. And along with it will go the US as a super-power. Our days of interfering with the rest of the world will be history. And good riddance I say. S5
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Before all this occurs, it is imperative that we understand what caused the first one, in 1929, and how the perceived history has been wrong for so long. Jude(U-dee) Wanniski discovered this decades ago, and I have no doubt he was spot on. Here is his article, which explains what happened in one easy to read essay.

I'm going to print it here, for everyone to read. I highly recommend you all read it closely, because it is vital that as many as possible understand how the world really works, and how this all could have been avoided.

Please Read This Article. Its Most Enlightening, and prophetic

Quote: “The Crash of '29 -- A New View”
by Jude Wanniski
October 28, 1977

[The last week of October 1929 remains forever imprinted in the American memory. It was, of course, the week of the Great Crash, the stock market collapse that signaled the collapse of the world economy and the Great Depression of the 1930s. From an all-time high of 381 in early September 1929, the Dow Jones Industrial Average drifted down to a level of 326 on October 22, then, in a series of traumatic selling waves, to 230 in the course of the following six trading days.

The stock market's drop was far from over; it continued its sickening slide for nearly three more years, reaching an ultimate low of 41 in July 1932. But it was that last week of October 1929 that burned itself into the American consciousness. After a decade of unprecedented boom and prosperity, there suddenly was panic, fear, a yawning gap in the American fabric. The party was over. Why? The following interpretation by Jude Wanniski, Associate Editor of the Journal is adapted from his forthcoming book, The Way the World Works: How Economies Fail, and Succeed, to be published next spring by Basic Books.]

* * *

The most common explanation of the crash is that the market was overpriced, the victim of heedless speculators who had somehow lost their grip on reality in the mad rush for quick profits. But that explanation has never quite satisfied, either empirically or logically. There is no real sense in which the market can be "underpriced" or "overpriced." For every seller, there is always a buyer -- at a price. The stock market, particularly the New York Stock Exchange, was and is too massive for any group of individuals to manipulate. At any moment, it is fully priced.

Technically, what the market measures in the process of absorbing information and translating it into a valuation of the market shares is the capital stock of the U.S. The market places a value on each company listed on its exchange, based on its calculations of that company's future income.

Stock Market Anticipates

The accent should be on "future." The market does not reflect past events, it reflects the probabilities of future events. It anticipates. From studies of stock splits, we know that the price of individual shares starts moving up, relative to other shares, about 12 months before a split. By the time the split is announced, nothing further takes place. The market has already fully discounted the event. The most important information coming to the market is political news. Changes in underlying economic values tend to be glacial. But political news is volatile, because it can instantly and dramatically alter the future income of the companies whose stocks are listed on the exchange. On November 22, 1963, for example, the day President Kennedy was assassinated, the industrial average fell 22 points. On recognition that a successful presidential transition had been made, it recovered all the lost ground the following day and gained 11 more.

If one accepts this rational model of stock market behavior, it's logical to believe that the market at its 1929 peak was exactly where it should have been, and that the crash resulted from some stupendous error in a relatively few political minds. In particular, one would look first for an explanation in tax policies, the actions of government that most directly affect future income flows. Arthur B. Laffer of the University of Southern California has described the "wedge" of taxes between what workers produce with their efforts and the rewards they are allowed to keep. A change in the future wedge will be quickly reflected in stock markets. A 150-point slide in the Dow Jones industrials ended at noon on May 29, 1962 as news reached the market that the Kennedy administration would propose the tax cuts that spurred the economy in the 1960s. The industrials gained 50 points that afternoon.

Smoot-Hawley Tariff Act

Looking back at the history of 1929, there is no dramatic increase in the domestic tax wedge to explain the market collapse. But there is also an international wedge -- the tax on international transactions. And here there is a dramatic event, the gathering political momentum of what is now conceded to be the century's most disastrous piece of economic legislation. The Great Crash of 1929 anticipated the Smoot-Hawley Tariff Act of 1930. The calamitous declines of Monday, October 28, and Tuesday, October 29, followed immediately the collapse of the Senate coalition that had been the last barrier to the tariff.

To understand the crash, though, one must back up to review the boom years of the 1920s. The great Coolidge bull market got under way in earnest in 1924. The industrial average, which had taken four years to move from 90 to 106 in the first part of the 1920s, reached 134 at the end of 1924, 181 by the end of 1925 and, after a pause in 1926, 245 at the end of 1927.

These were not paper, "speculative" gains, for this was a period of phenomenal growth in the nations's capital stock. Between 1921 and 1929, GNP grew to $103.1 billion from $69.6 billion. And because prices were falling, real output increased even faster.

The boom coincided with sharp tax cuts. To pay for the First World War, income taxes had been boosted to a high of 77% on incomes over $1 million. An excess profits tax on business and a doubling of the normal corporate rate to 12% had also been imposed. In the 1920 elections, Warren Harding, pledging a return to normalcy and a reduction in taxes, won by the greatest landslide in American history up to that time. Harding's Treasury Secretary, Andrew Mellon, engineered a tax cut -- the top bracket was reduced to 56% in 1921 and then to 46% in 1922. Because this reduction in the domestic wedge was partly offset by the mild increase in tariffs the administration also pushed through, there was only mild expansion in the economy. But after Harding's death, Calvin Coolidge succeeded to the presidency, and he quickly embraced Secretary Mellon's arguments for even more drastic tax reductions.

As Coolidge aptly explained in a speech to the National Republican Club in February 1924: "An expanding prosperity requires that the largest possible amount of surplus income should be invested in productive enterprise under the direction of the best personal ability. This will not be done if the rewards of such action are very largely taken away by taxation."

As it gradually became clearer through 1924 that the Coolidge tax bill to reduce the top income-tax rate to 25% had sufficient support for passage, the stock market began its unprecedented climb. It's interesting that Great Britain, which did nothing to reduce the steep progressive income taxes introduced during World War I, experienced no boom at all during the 1920s. By contrast, Italy under Mussolini went from severe economic contraction to rapid expansion in 1923 as he cut the wartime personal tax rates back and also cut back tariffs and internal excises. And the French, under a center-right coalition formed by Poincare, ended a financial crisis in 1926 by slashing the general income-tax rates in half, to 30% from 60% at the top.

Wealth brings its own problems, however. In the U.S., in particular, farmers were being hurt by the falling farm prices that were doing so much to raise the standard of living for the rest of the country. The Republican Party in 1928 looked at this phenomenon as something to be corrected by governmental action, and decided to attempt to adjust the imbalance in wealth between farm and city by raising the protective tariff on foreign agricultural products.

The U.S. from its earliest days had imposed tariffs as a source of revenue and as a protection for fledgling industry. But it was one thing to impose tariffs when the U.S. was a small debtor nation (and much of the tariff revenue was used to pay off the public debt, which in turn meant a decrease in future domestic tax liabilities). It was quite another matter for the U.S. to impose tariffs when, as a result of World War I, it had grown into the most powerful creditor nation in the world.

As tragic as the marginal farmer's plight might be, no GOP argument, political or economic, could justify higher tariffs. By restricting foreigners' ability to sell their goods in the U.S., the Republicans were making it more difficult for foreigners to pay off their debts to the U.S. and import goods from us. Over time, tariffs would, in essence, have the same inhibiting impact on investment and commerce as an increase in taxes. Herbert Hoover signed the Smoot-Hawley Bill on June 16, 1930, but the stock market started anticipating the act as early as December 1928.

Double Blow to Market

The market was hit a double blow in the space of a few days. On December 5, after the market had closed, Coolidge announced there would be no further tax cut in the next budget. The industrial average dropped 11 points the next day. It fell another eight points the following day as word got out that the House Ways and Means Committee had scheduled hearings of 14 subcommittees to take up tariff testimony, and that the hearings would cover all commodities, not just agriculture.

There was plenty of opposition to higher tariffs, though, and the market soon continued its upward climb, reaching 300 by year's end and continuing to climb until March 23, 1929, when real trouble began. The tariff hearings were under way, Hoover had been inaugurated March 4 and on March 24, a Sunday, the world got bad news on page 2 of The New York Times: Senator Jack Watson, the Republican Senate leader, predicted in an interview that it would be difficult to limit tariff increases to agricultural products.

Senators, he noted, were being deluged by industries in their own districts for similar treatment. On Monday, the stock market broke heavily again. There was more bad news on Tuesday, March 26. New York and New England's elected officials called on Hoover for tariff increases on rayon, cotton and related materials. Stocks crashed on record volume (8,246,740 shares), though a late rally stemmed the tide.

Interestingly, though The New York Times and other papers closely followed the tariff hearings -- and the stock market's activity, of course -- the two weren't linked. A typical headline in the Times was March 26's "Stock Prices Break Heavily as Money Soars to 14%." The front-page story blamed the sell-off primarily on a tightening of credit; there was no mention of tariff matters, though a separate story on tariffs appeared on page 19. The reference to "money" going to 14% referred only to spot loans to individuals who had bought shares on margin and were having to raise fresh funds to cover their accounts. Long-term rates didn't rise. The Times and others would insist on linking money rates and stock prices right through the October crash.

Opposition to the tariff binge began to materialize in the Senate, and it appeared that a combination of progressive Republicans and Democrats would prevail against the Old Guard Republican protectionists. A procedural vote before the summer recess seemed to confirm this, and the stock market, reassured, resumed its climb, reaching 381 on September 3. The Dow Jones industrials wouldn't see that level again for more than a quarter of a century.

The decline over the next several weeks was orderly; by October 10, the market had drifted down to 352. On October 22, the market even gained six points on news that anti-tariff forces had won a test vote to cut chemical tariff rates. But on October 23, an hour before the market closes, disaster strikes: The market declines a stunning 21 points after news is out that the anti-tariff coalition has broken apart on the question of carbide rates. The carbide rates themselves are relatively unimportant; the vulnerability of the anti-tariff forces is the key. Yet the remarkable coincidence again goes unremarked in the next day's newspapers.

Morning Panic, Afternoon Rally

On Thursday, October 24, the anti-tariff forces suffer another setback; casein tariffs are raised 87%. John Kenneth Galbraith, in his book, The Great Crash -- 1929, describes the day on Wall Street: "The panic did not last all day. It was a phenomenon of the morning hours....For a while prices were firm. Volume, however, was very large, and soon prices began to sag. Once again the ticker dropped behind. Prices fell farther and faster, and the ticker lagged more and more. By eleven o'clock the market had degenerated into a wild, mad scramble to sell. In the crowded boardrooms across the country the ticker told of a frightful collapse....By eleven-thirty the market had surrendered to blind, relentless fear. This, indeed, was panic."

By afternoon, however, the anti-tariff forces had reassembled and pushed through amendments cutting other chemical rates. The stock market rallied and closed with only a 6½-point drop. The following Monday morning's Times provides the hardest news yet that the anti-tariff coalition had broken and the pro-tariff coalition was in control.

Not only did Senator Smoot predict the bill would survive. So did Senator Borah, until then leader of the anti-tariff forces, saying he thought "it is going to be made into a good bill." Worse yet, Democratic leader Simmons said the Democrats would do nothing to kill the bill, that the Republicans would have to take full responsibility. In the day's trading, the DJI dropped 38 points in what the Times called a "Nation-wide Stampede to Unload."

The following day, Black Tuesday, the industrials fall 30 points more, to 230, as all the reports coming out of Washington seem to be aimed at assuring the stock market that the tariff bill will not be killed. Senate Majority Leader Watson even complains that Democratic delays might be charged with responsibility for the crash in stocks!

Recovery on Tax Cut

On November 13, the market hits its low for the year, 198. A surprise 1% tax cut announced by Mellon shores up the market -- it recovers to 263 by the end of December. But the Senate resumes work on the tariffs in the spring despite vigorous protests from U.S. trading partners; there is still hope that Hoover might veto the bill.

On June 13, the Senate approves by two votes the measure to increase tariffs on more than 1,000 items and sends the bill to Hoover. On this news, the stock market breaks 14 points to 230, precisely where it was on the bottom on Black Tuesday, October 29. Hoover signs the bill and stocks tumble again. The market slide does not end until Franklin Roosevelt, a tariff foe, is nominated by the Democrats in 1932.

Most one-term Presidents only have time for one truly disastrous decision. Herbert Hoover squeezed in two. Having crimped international trade, he proceeded in 1932 to squeeze the domestic economy directly by pushing through Congress a measure to boost the income-tax rate back to 63% from 25% and piling on business taxes too. His aim was to reduce the budget deficit of the preceding 18 months, caused by the gathering slowdown. With ample help from the Democrats, Congress approved the tax increase. Under Roosevelt, economic management was only slightly improved, for even as he and his party chipped away at Smoot-Hawley, they again and again added to internal taxation during the following eight years, and the depression lengthened into war.
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#2
The next big crash, we all know it, will be when poeple will stop buying sovereign bounds.
The US will have to do urgent trillion dollar QE, sort of bqiling themselves out, which will crash the value of the USD. Other governements will default on their debt at the same time, give or take one day.

Then you will see a crash... oh my...!

I plan it for august 2015 or 2016.
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#3
If its going to happen that soon, I hope it occurs on MacDaddy's shift. It will be interesting to see how he will blame 100% of it on Junior.
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#4
Yeahm he won't blame it on Big Gov'.
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#5
I'm thinking the UK real estate bubble or Buffet's China collapse prediction.
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#6
The Chinese banking system is the most vulnerable. I was listening to someone, or reading an article, I can't remember which, and it was discussing how major Chinese banks have been cooking their books, robbing Peter to pay Paul, and shifting assets so as to make things look great, when they are on the verge of crashing.

All it is going to require is for a US monetary/fiscal crisis, and everything can come crashing down.
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#7
I think the Cinese governement keep a hold on the banks in a way that they can't collapse the way we understand it.

UK real estate bubble? Didn't it collapsed yet, or was it only mortgages?
Anyway while worrying, it's not even close as the sovereign debt bubble.
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#8
Here is an interesting article, from the Zero Hedge Guy: "QE Was A Massive Gift Intended To Boost Wealth", Fed President Admits". This is all about what occurs when the influential members of the elite Keynesian Superstition practice their religion on the rest of we unsuspecting citizens.

Quote:With Bernanke gone, the remaining Fed members knowing full well they will be crucified, metaphorically of course (if not literally) when it all inevitably comes crashing down, are finally at liberty with their words... and the truth is bleeding out courtesy of the president of the Dallas Fed, via Bloomberg.

FISHER SAYS QE WAS A MASSIVE GIFT INTENDED TO BOOST WEALTH

Which incidentally coincides with Bernanke's heartfelt "admission" that "my natural inclinations, even if it weren’t for the legal mandate, would be to try to help the average person." As long as helped to boost the wealth of the non-average billionaire., all is forgiven. "The result was there are still many people after the crisis who still feel that it was unfair that some companies got helped and small banks and small business and average families didn’t get direct help,” Bernanke said. “It’s a hard perception to break." The truth, as again revealed by Fisher, will not help with breaking that perception.

We wonder how President Obama, that crusader for fairness, equality and all time Russell 200,000 highs, will feel about that? In the meantime, just like the Herp, QE is the gift that keeps on giving.. and giving... and giving... to the 0.001%.

[Image: 20130911_inequal1.jpg]

This is all such a total farce, that were it not so seriously leading to a total finacial, economic, and monetary, collapse, it would rank right up there with the Marx Brothers. And these brilliant idiots are going to skate completely away from all this without ever having to pay any price whatsoever. And Bernanke was trying to help the 'little fellow' by increasing the money supply, ramping up inflation, and making everyone's money shaky and unstable? Didn't he realize that making things so lucrative for the super-rich, in this manner, has almost no 'trickle down' effect on the rest of us?

This is exactly why those who consider themselves to be Keynesians really need to be interned into special reeducation camps, so as to clear their 'Kindergarden of Eden' minds, and help them grow up to the REAL WORLD, before they destroy everyone else. This is not economics. Its Vodoo Economics, and just the polar opposite of what that brilliant leader, Bush Seniour, kept trying to practice when he made that idiotic statement while competing against Ronald Reagan in 1980. That is why ANY Bush needs to be forcefully restrained from ever entering the WH again,.....EVER!

Jesus H. Christ!, where did these people purchase their brain? From the local meat market? This is exactly why the US is in the terrible condition it is in today, all because of the incestuous marriage between the Collectivists and the Keynesians, who all believe in the concept of getting 'Something For Nothing' on a continual basis.
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#9
I generally agree. Bush 41 was a bad fit for Reagan as VP, but probably necessary to win the nomination. The complicated aspect comes into play when you realize that Bush 43 used Reagan as his Presidential template - not his father. He loved his father, but believed what Reagan was about was more germane for his Presidency. He would never be divorced from what his father wanted - but was bringing down the deficit until well after 911.

Yes, he was into bipartisanship, as much in Washington as in Austin, but aside from the squishy ideas from the Left that he enacted: higher spending for education, for instance, he did believe in balancing the budget. He was on the way to doing that, when his popularity polling went through the roof, and the Democrats made the decision to discontinue any bipartisan participation and kidnap the economy and blame it on Bush - in order to win back power.

It is always hard to read charts of economics based on quintile - because so much rides on the details. Under Reagan, the upper quintile prospered - but so did all the other quintiles. The lowest fifth actually prospered better than the highest on pure percentage improvement, and more moved from the bottom into higher ones than ever before. At the same time, benefits were increased far more than mere salary. The "rising tide lifts all boats" was not invented for the Reagan economy, but was certainly apt.

Bush 43 was outfoxed by the Dems, for sure, but blame that on Bush's following the Reagan model, also. Reagan said he did not argue with his detractors - so neither did Bush. However; Reagan found ways to respond without open debate, earning him the "Great Communicator" sobriquet. Bush just believed History would prove him out. His failure to battle back allowed the Left to gain momentum and drive the economy further into a hole.

The economic picture is more complicated than the graph shows. Any "next big crash" will have as many outside pressures to trigger it as internal ones.
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#10
A good view on all this can be found at The Supply Side Blog:

Paul Kengor Wrote:...Reagan presided over the largest tax cut in American history and accomplished it in tandem with a huge Democratic Party majority in the House. It was a bipartisan triumph that The Washington Post called “one of the most remarkable demonstrations of presidential leadership in modern history.” Unlike President Obama, who derided his Republican congressional opposition as “hostage takers” and denounced their desire for tax cuts, Reagan found a way to work with the opposition to advance the country.
After a slow start through 1982-83, the stimulus effect of the Reagan tax cuts was unprecedented, sparking the longest peacetime expansion/recovery in the nation's history: 92 consecutive months. The bogeymen of the 1970s — chronic unemployment and the deadly combination of double-digit inflation and interest rates — were vanquished. The poverty rate dropped; the standard of living soared. The Dow Jones industrial average, which, in real terms, had declined 70 percent from 1967-82, nearly tripled from 1983-89.

Contrary to liberal demonology, blacks and other minorities did extremely well during the Reagan years. Real income for a median black family had dropped 11 percent from 1977-82. But from 1982-89, coming out of the recession, it rose by 17 percent. In the 1980s, there was a 40 percent jump in black households earning over $50,000.

Black unemployment (which has increased significantly under President Obama) fell faster than white unemployment in the 1980s. The number of black-owned businesses increased by almost 40 percent while the number of blacks enrolled in college increased by almost 30 percent (white college enrollment increased only 6 percent).

There were likewise impressive numbers for Hispanics and women. Hispanic-owned businesses in the 1980s grew by an astounding 81 percent and the number of Hispanics in college jumped 45 percent.

Overall, the “Reagan Boom” not only produced widespread prosperity but — along with the attendant Soviet collapse — generated budget surpluses in the 1990s. Carter-era terms like “malaise” and “misery index” vanished. Only during the Obama years, and specifically in 2011, has America re-approached similar misery-index levels, reaching a 28-year high.

All of this is not just history. It's a crucial economics lesson that we need to learn and remember. We neglect it to our detriment.
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#11
Junior did not follow the Reagan model Bill. What he did was cover himself with the cloak of Reagan, which is different. Its exactly the same thing FDR did with the title of Liberalism. He covered his Progressive ass with a very thin cloak of Liberalism. And both Junior and FDR pretty much got away with it. Hell, you believe it, and you are supposed to be the smartest thing since peanut butter and sliced bread, right? So why shouldn't the rest of we peons be fooled? S5

Junior was no Reagan: never was and never will be. The big plus going for him is that Junior was a very moral man, in spite of his Statist ideology, which his Daddy taught him in spades. All those Damned Bushes are alike. They're Big Government Dumbasses.
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#12
Don't confuse Reagan with a Classic Libertarian. He followed the economics which he learned at school - which was pre-Keynesian, thank God. He understood what JFK knew, and used the same man, Robert Mundell, to enact it into law.

Other than that, he was a well-mixed bag of both large and small government. He was a social moderate. Understanding that, explains why Bush 43 felt empowered to play the same game without the same attention to detail.
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#13
I think it happened rather quickly and it was a combination of greed and the loss of money that sent the rich into a panic.

"The crash began on Black Thursday, October 24, 1929. The stock market opened at 305.85, falling 11% during the day, barely a stock market correction. It regained, to close just 2% down for the day. Nevertheless, Wall Street bankers were worried because trading was triple the normal volume.

On Black Monday, October 28, the market fell another 13%, even though the bankers had feverishly bought stocks to prop it up.

The next day was Black Tuesday, when the market fell another 11%, as panicked investors stampeded out of the stock market. Over 16 million shares were sold that day.

Over the four days of the stock market crash, the Dow dropped 25%, losing $30 billion in market value. (That's worth $396 billion today.) Although we are used to trillion-dollar losses today, back then the public was terrified. This was more than the total cost of World War I! The confidence that's essential for a healthy economy was lost."

http://useconomy.about.com/od/glossary/g...f-1929.htm


I believe the next one will be even bigger and global. And it will happen quickly, as well, as there are still phoney deals being made and money assumed which doesn't exist. Hedge fund managers will be the culprit. That, and Congress, which didn't stop the betting on the economy from the banks.
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#14
LL, the real cause for the 'so called' Crash, which was really a jolting up and down slide, was Fear. The fear was the result of Smoot-Hawley, which was a protectionist bill winding its way through the congress. Jude Wanniski, discovered this in the 1970s and even many on the Left have also privately acknowledged it as the real cause. Here's one of his former lessons: Why Wall Street Crashed.

"The market does not reflect past events, it reflects the probabilities of future events. It anticipates." - Jude Wanniski

Stock markets slides are almost always caused by fear of some anticipated result.

As for 'greed', all humans possess self-interest, or selfishness. And it really does get lots of good things done, as a result of looking out for 'Your's Truly'. It is breaking the law that is wrong. Adam Smith did a good job of describing this and how it is a good thing, because it is the result of a unique human trait; Individualism.

Here are some Adam Smith quotes:

“How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others and render their happiness necessary to him though he derives nothing from it except the pleasure of seeing it.”

“It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest”

“By directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”


This selfishness is what the Supply-Demand equation is all about. Its glorified reciprocity of "You do something of value for me, and I do something of value for you." Its the basic law of economics.
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#15
(05-06-2014, 12:37 PM)John L Wrote: LL, the real cause for the 'so called' Crash, which was really a jolting up and down slide, was Fear. The fear was the result of Smoot-Hawley, which was a protectionist bill winding its way through the congress. Jude Wanniski, discovered this in the 1970s and even many on the Left have also privately acknowledged it as the real cause. Here's one of his former lessons: Why Wall Street Crashed.

"The market does not reflect past events, it reflects the probabilities of future events. It anticipates." - Jude Wanniski

Stock markets slides are almost always caused by fear of some anticipated result.

As for 'greed', all humans possess self-interest, or selfishness. And it really does get lots of good things done, as a result of looking out for 'Your's Truly'. It is breaking the law that is wrong. Adam Smith did a good job of describing this and how it is a good thing, because it is the result of a unique human trait; Individualism.

Here are some Adam Smith quotes:

“How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others and render their happiness necessary to him though he derives nothing from it except the pleasure of seeing it.”

“It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest”

“By directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”


This selfishness is what the Supply-Demand equation is all about. Its glorified reciprocity of "You do something of value for me, and I do something of value for you." Its the basic law of economics.


I can see your point. But we haven't had supply and demand since we've had monopolies price gouge and price fix the economy. When only a handful of people control all your economic outlets, you don't have supply and demand.
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#16
Liberal Leaning, what John posted is right on.
was parodied in the movie, Ferris Buehler's Day Off, by Ben Stein. He segued into the Laffer Curve and Bush 41 calling it "Voodoo Economics."

While the Tariff Act didn't single-handedly create the Depression, it did what Wanniski wrote about: anticipating future events. It's enactment solidified the bad effects, and FDR made them far worse and prolonged the Depression far longer than a normal recovery would have taken.
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#17
(05-06-2014, 02:20 PM)WmLambert Wrote: Liberal Leaning, what John posted is right on.
was parodied in the movie, Ferris Buehler's Day Off, by Ben Stein. He segued into the Laffer Curve and Bush 41 calling it "Voodoo Economics."

While the Tariff Act didn't single-handedly create the Depression, it did what Wanniski wrote about: anticipating future events. It's enactment solidified the bad effects, and FDR made them far worse and prolonged the Depression far longer than a normal recovery would have taken.

VooDoo economics was the phrase given to Reagan's economic plans.

http://en.wikipedia.org/wiki/Reaganomics

Quote:Reaganomics (/reɪɡəˈnɒmɪks/; a portmanteau of Reagan and economics attributed to Paul Harvey)[1] refers to the economic policies promoted by U.S. President Ronald Reagan during the 1980s and still widely practiced. These policies are commonly associated with supply-side economics, referred to as trickle-down economics by political opponents and free market economics by political advocates.

The four pillars of Reagan's economic policy were to reduce the growth of government spending, reduce the federal income tax and capital gains tax, reduce government regulation, and tighten the money supply in order to reduce inflation.[2]

Contents

And this economic philosophy is what has crashed our economy in 2008 and has destroyed our economic reign in the world.
"I was recently on a tour of Latin America, and the only regret I have was that I didn't study Latin harder in school so I could converse with those people." —Dan Quayle
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#18
(05-06-2014, 02:15 PM)Liberal Leaning Wrote: I can see your point. But we haven't had supply and demand since we've had monopolies price gouge and price fix the economy. When only a handful of people control all your economic outlets, you don't have supply and demand.

Can you please give some specific examples, other than the practice of Corporatism, which is State sponsered.

This country is headed on the road to Fascism, and it is the result of large corporations feeding at the trough of Big Government. They contribute huge sums of campaign cash, and are handed rewards by both parties actually. But the Jackasses are the worse of the two.

Please show some examples of the price gouging and fixing you mention above?
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#19
(05-06-2014, 03:59 PM)John L Wrote:
(05-06-2014, 02:15 PM)Liberal Leaning Wrote: I can see your point. But we haven't had supply and demand since we've had monopolies price gouge and price fix the economy. When only a handful of people control all your economic outlets, you don't have supply and demand.

Can you please give some specific examples, other than the practice of Corporatism, which is State sponsered.

This country is headed on the road to Fascism, and it is the result of large corporations feeding at the trough of Big Government. They contribute huge sums of campaign cash, and are handed rewards by both parties actually. But the Jackasses are the worse of the two.

Please show some examples of the price gouging and fixing you mention above?

Sure. Gasoline. They take in

http://www.motherjones.com/politics/2014...tax-breaks

Quote:Over the past century, the federal government has pumped more than $470 billion into the oil and gas industry in the form of generous, never-expiring tax breaks. Once intended to jump-start struggling domestic drillers, these incentives have become a tidy bonus for some of the world's most profitable companies.

Taxpayers currently subsidize the oil industry by as much as $4.8 billion a year, with about half of that going to the big five oil companies—ExxonMobil, Shell, Chevron, BP, and ConocoPhillips—which get an average tax break of $3.34 on every barrel of domestic crude they produce. With Washington looking under the couch cushions for sources of new revenue, oil prices topping $100 a barrel, and the world feeling the heat from its dependence on fossil fuels, there's been a renewed push to close these decades-old loopholes. But history suggests that Big Oil won't let go of its perks without a brawl.

Despite that, gas prices go up unilaterally at every gas pump in an area.
"I was recently on a tour of Latin America, and the only regret I have was that I didn't study Latin harder in school so I could converse with those people." —Dan Quayle
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#20
BTW, corporatism applies to the federal and state government...to our nation, really

http://www.merriam-webster.com/dictionary/corporatism

Definition of CORPORATISM
: the organization of a society into industrial and professional corporations serving as organs of political representation and exercising control over persons and activities within their jurisdiction



Buying off politicians, they have gotten rid of OSHA, The Department of Labor effectiveness, regulations on pollution, shattered the anti-trust laws, and now have themselves paying virtually no taxes.

http://www.huffingtonpost.com/2014/02/25...55763.html

Many American companies are paying federal income taxes at far below the 35 percent rate often cited as the highest in the world. And many of the most profitable companies are effectively paying no taxes at all, according to a new report by the left-leaning Citizens for Tax Justice (CTJ), which advocates for tax fairness.
"I was recently on a tour of Latin America, and the only regret I have was that I didn't study Latin harder in school so I could converse with those people." —Dan Quayle
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