Tuesday, June 23, 2009

Say hello to

News from 1930 (h/t Calculated Risk)

It is rather educational to read through some of the happy talk on WSJ at the time, and compare it to some of today's economic happy talk. Some examples:

June 18:

Dow Industrials have broken below the bottoms of last May and December but remain well above panic bottom of November. Railroads have gotten almost down to the November level; Utilities are in between but closer to the Industrials. The rally ending in April was probably overly optimistic, hoping for a revival of business at midyear; buyers then are probably selling in disgust now. If two or three of the averages break down below the November level, this may be a warning that the bear market begun last fall isn't over, “though it might nevertheless be near its end.” Also remember that major swings in the market usually go further than business conditions justify.

Maurice S. Benjamin of Benjamin, Hill, & Co. predicted two months ago that the market would have to undergo a severe pullback before reaching new highs. He then sailed for Europe. Following that correct call, he now says the decline is over and predicts a quick improvement in business, stock prices much higher by fall, and still higher by next spring.

June 23:
Col. Ayres, VP Cleveland Trust, predicts an abrupt recovery in stock and commodity prices by Labor Day due to current consumption exceeding production. Distinguishes between two types of depression, “V”-shaped and “U”-shaped.

[snip]

Heard on the Street:

“'Things are getting back to normal,' remarked the head of a Broadway house. 'Again the main topic of discussion among our customers is the 18th amendment.'” [Prohibition]

Happy days are here again!

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