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Is the Stock Market Repeating the 1929 Run Up to the Great Depression?

George Washington's picture




 

Chart courtesy of Tom McClellan of the McClellan Market Report (via Mark Hulbert)

Hulbert notes that the chart “has been making the rounds on Wall Street.”

On the other hand, Martin Armstrong predicts that a worsening economy – and bank deposit confiscation – in Europe will cause people to flood into American stocks as a “safe haven” for a couple of years.

And the Fed has more or less admitted that propping up the stock market is a top priority.

Bonus:

 

 

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Wed, 02/12/2014 - 19:36 | 4430230 hobopants
hobopants's picture

Doing the same dumb shit will usually produce the same poor results. For example if I lay down on the freeway and survive getting hit, should I attempt it again because "history doesn't repeat itself"? What do you think the result would be?

Regarding the graph... who knows? 1929 was a different time and place, but when two patterns begin to coalesce like that (both in a time of FED stimulus) I think it warrants at least a little attention.

Wed, 02/12/2014 - 09:57 | 4427607 andrewp111
andrewp111's picture

Comparing the current market to 1929 is kind of lame. Just look at the scales on both curves. The market in 1929 nearly doubled. The current one has a long way to go before it doubles in the same time frame. If we get something like 25000 on the DOW, I'll believe we are repeating 1929.

Wed, 02/12/2014 - 08:32 | 4427417 paint it red ca...
paint it red call it hell's picture

"Stock Market Repeating the 1929 Run Up to the Great Depression"

Should have read 'The manipulator's are repeating'

My mother was a child of the depression who went ragged, labored and starved in Appalachian coal mining destitution as a child. Growing up that way made a hard, tough, determined laborer for the war effort who's only thought was of work to provide for her kids in a way she could only have dreamt of growing up. What has confounded me was her blanket praise for the good AND the bad of FDR policies, including wealth confiscation by various means. (my father's $40 1929 bank savings account was reduced to $6 by the time it could be withdrawn, not including the 30% gold backing devaluation)

Considering the dilemma now faced, I have gained an appreciation for the depth of despair from which she developed a hero worship of FDR.

I believe that is again the plan. To generate a depth of despair so great, that whatever policies give relief will be accepted willingly with gratitude by a desperate and despairing population. God help us all, I just can't imagine relief policies from this bunch despots will be as humane as FDR's were.

Wed, 02/12/2014 - 03:55 | 4427182 Uber Vandal
Uber Vandal's picture

The second set of charts in this link from a week ago (23 day analog) is also a bit coincidental......

http://www.zerohedge.com/news/2014-02-05/demarks-dire-forecast-and-why-c...

Business Insider calls stock chart overlays "lazy", and has been commenting on this sort of thing since November, 2013:

http://www.businessinsider.com/andrew-wilkinson-debunks-chart-2013-11

Of course, when everything goes explodey, I am supremely confident that there will be no shortage of people proclaiming that "everyone knew that this was a bubble"

 

 

Wed, 02/12/2014 - 02:39 | 4427102 working class dog
working class dog's picture

Hey ride never ends, you are correct, this chart is not showing an accurate picture of then and now, author please do your research before posting something.

Tue, 02/11/2014 - 23:16 | 4426626 The Wisp
The Wisp's picture

Every Body laughs at the Preppers, until they need to Borrow your generator...

Wed, 02/12/2014 - 07:13 | 4427331 Dr. Sandi
Dr. Sandi's picture

Hey Bud, can I borrow a can of bacon?

Tue, 02/11/2014 - 23:19 | 4426621 Reaper
Reaper's picture

Hoover thought himself to be a Central Planning genius.   Obama thinks himself a Central planning genius.  The Fed pumped the market in 1929.  The Fed pumps the market today.  Does government schooling foster intelligence or obedience? 

Tue, 02/11/2014 - 22:03 | 4426335 dexter_morgan
dexter_morgan's picture

its different this time, we have the FED to save us.......d'oh, wait, we had the fed to 'save' us back then too. so sorry

Tue, 02/11/2014 - 21:22 | 4426189 assistedliving
assistedliving's picture

i know...just tell me when

Tue, 02/11/2014 - 21:20 | 4426176 rex-lacrymarum
rex-lacrymarum's picture

Tom DeMark identified the pattern MUCH earlier - many months ago in fact. 

Tue, 02/11/2014 - 19:49 | 4425806 BeetleBailey
BeetleBailey's picture

LOTS of shit could bring this fucked up rigged casino market down;

Something birzarrely fucked up - like China does some shit.

Japan could piss off China.

A big god damned tsunami could wipe something out. Ditto Mr. Big Motherfucking Earthquake.

War could break out somewhere "soft" (The EU - fuck Iraq/Afbanana - they're used to this shit - and the MIC stocks are FLYIN....)

Some fat fingered fuck at Pukleys or Smells Fartgo. DoucheBank, or some sinister TERRORISTS could Tim McVeigh the system.

Yeah yeah....the Fed is propping up this fucking cow. But they ain't Motherfucking Nature, and the longs are banking on NOTHING major happening in the foreseeable future.

Give me a time period that NOTHING bad happened - NOTHING. You get the Roaring fucking 20's - which is why this shit-chart is porned up for the shorts a la "hopium el reverso".

In closing for today;

 

FUCK YOU -

GOVERNMENT - ALL OF YA

BANKS - EVERY GOD DAMNED ONE OF YA

THE BILDERBOOGERS - EVERY MERCEDES DRIVEN DOUCHE THAT ATTENDS THE STROKE FESTS

THE TRILLIONAIRE FUCKS

 

 

 

Tue, 02/11/2014 - 19:40 | 4425780 swass
swass's picture

I'd be somewhat careful with analogs.  History never repeats itself exactly, even though it can resemble the past.  Hopefully we do see a major crash -- not JUST because I'd make lots of money -- because we need to clear the books, get rid of malinvestment and debt, then maybe the market can restructure and our children will have a future in this contry.

Tue, 02/11/2014 - 19:43 | 4425790 logicalman
logicalman's picture

Two things that never change - Stupidity and Greed.

Understanding that is very important.

Tue, 02/11/2014 - 18:12 | 4425386 mendolover
mendolover's picture

Is it as hard for Joe Blow in Europe to trade on foreign exchanges as it is for Joe Blow in the US?  I mean alot  of people don't have the minimum balance available to trade foreign stocks on TD Ameritrade for instance.

Tue, 02/11/2014 - 17:38 | 4425225 the not so migh...
the not so mighty maximiza's picture

something strange today , i was told by my bank all cash deposits need ID now, they never needed that before, she said "we know you so its ok we won't today but be prepared the future"(was that a sublime slip?),  i then said "are you serious capital controls??"  the bank manager was looking over his cubical with the his squinty little eyes.  somehting is really weird going on.   I never had the feeling before, i have been preparing so i am not shocked.  this graph is showing more then just an upcomming crisis. or did i just drink too much cherry brandy last night?

 

Wed, 02/12/2014 - 10:16 | 4427674 astoriajoe
astoriajoe's picture

I suppose its a policy against localbitcoins.com, for whatever its worth.

That site allows you to buy btc by depositing cash into the bank account of someone selling the coins on their site. You initiate the transaction, the coins go into an escrow of sorts, until the seller can verify that you've deposited the money, then the btc are released.

the thing is, you didn't need any id to do the transaction, just an account number. Just my $0.02.

 

Wed, 02/12/2014 - 07:10 | 4427330 Dr. Sandi
Dr. Sandi's picture

 

something strange today , i was told by my bank all cash deposits need ID now

Sounds like high time for a fresher and smaller bank.

Tue, 02/11/2014 - 19:06 | 4425641 monoloco
monoloco's picture

It's just a matter of time before you'll have to show an ID just to spend cash.

Wed, 02/12/2014 - 02:02 | 4427051 TheRideNeverEnds
TheRideNeverEnds's picture

pff they wont even accept your cash even WITH an ID 

 

http://youtu.be/88bCYz66z4Q?t=14s

Tue, 02/11/2014 - 18:27 | 4425444 LMAOLORI
LMAOLORI's picture

 

 

I wonder if that's a new law or something?  I haven't had any problems but I haven't deposited cash lately either. At least we don't have to do this YET!

 

EU to force Britons to publish details of wills and property

http://www.telegraph.co.uk/finance/personalfinance/10624818/EU-to-force-...

Tue, 02/11/2014 - 17:25 | 4425178 LMAOLORI
LMAOLORI's picture

 

 

George did you see this?  

Lights Out for NSA? Maryland Lawmakers Push to Cut Water, Electricity to Spy Agency Headquarters

snip

 

note this portion

 

The bill would deprive NSA facilities water and electricity carried over public utilities, ban the use of NSA-derived evidence in state courts and prevent state universities from partnering with the NSA on research.

 

http://www.usnews.com/news/articles/2014/02/10/lights-out-for-nsa-maryla...

Wed, 02/12/2014 - 02:00 | 4427046 TheRideNeverEnds
TheRideNeverEnds's picture

Meh, does Maryland have a Natty Guard Unit?  If so and I was the Governor I would have them conduct a "preparedness drill" and accidentally the whole place to the ground leaving no survivors. 

Tue, 02/11/2014 - 21:31 | 4426223 are we there yet
are we there yet's picture

Be careful what you wish for. If you object to an overly powerful government, I agree.  If you object to a government having correct foreign intelligence rather than sloppy blind foreign intelligence, then I am less on board. Our leaders are stupid enough without having stupid information to act on. NSA is not a political entity. They are more like babysitters for stupid children (our leaders) letting them know what is an overreach. I am pretty sure intelligence agencies and the military try to keep us out of wars, and politicians and their puppetmasters try to get us into wars. So be careful what you wish for.

Wed, 02/12/2014 - 09:21 | 4427496 CJHames
CJHames's picture

I agree with you to a point.  However, if you think for one minute that the NSA hasn't been politicized and infiltrated by this administration you are sadly mistaken. The Pentagon (see the vast purging of General Officers and other high ranking military), the IRS, the DEA, the FBI (see Eric Holder), et al have ALL been taken over by leftist idealogues since Owebama took office.

To think that the NSA has somehow been left alone is pure folly IMO.  After the IRS was taken over, I think the NSA was #2 on their take over list.

 

Wed, 02/12/2014 - 01:26 | 4426982 TheUnwisestWizard
TheUnwisestWizard's picture

I am pretty sure - no actually I know you are wrong.  The reason being is that you don't vote for this group so they really don't care.  They do what their funding partners do.   The biggest myth is that the president appoints and controls the cia and the fed.  the cia/nsa and federal reserve actually are above the president and he appoints a crony that he is told to appoint so it looks as if they are the 'secretary' - a funny word used at the highest levels of office - these secretaries set and execute the agenda.  Prezo is a figure head that signs stuff and smiles.  Do you really think Obama is engineering this whole take down - they have him thinking he is the best president since kennedy or lincoln... they even gave him a peace prize in his first year. 

 

The intelligence agencies and the military are two seperate things... the intel is manipulated and the military carries out orders.  The intel is the most important apparatus and is controlled from outside of the USA by non-elected group... who do you think has the best interests at heart.

 

This country will burn and we will all be able to smell the smoke.  They will be able to make us fight each other with statements like what you are saying... I'm sorry but you need to have your head and rectum examined.

Tue, 02/11/2014 - 18:01 | 4425319 halfawake
halfawake's picture

This would be fantastic. But given how close MD is to DC, they'd probably get blimp-bombed. Didn't the citizens of Utath try to do something similar, or was that another state? Imho, i see wide scale seccession in the US future. Little drops like this...

Tue, 02/11/2014 - 18:04 | 4425334 LMAOLORI
LMAOLORI's picture

 

 

I guess but at least it's being given attention because 1984 has really arrived. I just came across this I bet it's the NSA..

 

This malware is frighteningly sophisticated, and we don’t know who created it

 

http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/10/this-malwar...

Tue, 02/11/2014 - 21:20 | 4426181 Absinthe Minded
Absinthe Minded's picture

You fucker! You just posted a link that sent me to a WAPO link just like the malware does. How do I know you didn't get me infected?!?!

Wed, 02/12/2014 - 07:11 | 4427328 Dr. Sandi
Dr. Sandi's picture

Always wear a body condom while swimming and surfing the web. There's a lot of dangerous stuff in those waters.

Tue, 02/11/2014 - 18:12 | 4425374 halfawake
halfawake's picture

Yeesh. Only a matter of time. Most client systems (PCs, phones) are really easy to hack. And most of the security focused linux distros I know of have pieces of DoD code, so.. reminds me of stuxnet. That is one bad mofo. Lays dormant for years.

Tue, 02/11/2014 - 16:41 | 4424996 andrewp111
andrewp111's picture

The 1929 move involved a near doubling of the DOW. You may compare the current era to 1929 when the DOW pushes 25000.

Tue, 02/11/2014 - 23:45 | 4426709 Spankrupt
Spankrupt's picture

It has doubled - almost trebled since 2008

Wed, 02/12/2014 - 01:44 | 4427021 TheRideNeverEnds
TheRideNeverEnds's picture

But it doubled from 1927-29, if that chart was log scale it wouldn't even be close.  The comparison is laughable. 

 

Its not happening, the DOW has affirmed generational lows when we broke over the 14,000 area, in the rest of human history the DOW will never again trade below 14,000 nominal, hell we will probably never even see 15,000 again. 

 

This is just year two of the breakout.  Don't believe all the hype, it is not even remotely possible that this bull market is near a top yet.  There is not a single shred of evidence to support such an assumption besides curve fit misleading charts such as posted here.  Some time in 2016 when the DOW is over 30-40,000 sure maybe we will get a correction of 50% or so but that would just bring us back to where we are right now and maybe not even this low, till then just buy everything, we are going incredibly higher.

 

Go look at the tape right now; LOOK AT IT, not a fucking down tick in sight, this bull market is just getting its legs under it.

Tue, 02/11/2014 - 16:41 | 4424993 corporatewhore
corporatewhore's picture

try to tell that to those people selling their homes at these inflated/bubble prices

Tue, 02/11/2014 - 16:26 | 4424948 Finnman
Finnman's picture

Shit!

Tue, 02/11/2014 - 16:28 | 4424945 ptoemmes
ptoemmes's picture

Was the DJIA then any more (or less) indicative of the economy most like us have to live in?  

The concensus (here) today is that the DJIA (and other major indices) are not all that reflective of the real economy any more due to the well documented "central planning" manipulations

On the other hand, I have little doubt if the indices crater as many expect/hope - and like 28-29 - many of us will be dumpster diving and wiping our ass with leaves and twigs.

Tue, 02/11/2014 - 16:30 | 4424923 JustObserving
JustObserving's picture

Now the Fed can print as much as it wants.  The US went off the gold standard on Aug 15 1971 due to the Vietnam war which cost just $738 billion in 2011 dollars.  

The Iraq and Afghanistan wars cost $6000 billion but it has had little effect on the US economy thanks to Fed printing.

If the US stock market falls, the Fed will print as much as needed, even $10 trillion, and buy US stocks.

Also, whenever stocks begin to flounder, the PPT is there to support the markets.

Barring some catastrophic event, it is unlikely that US markets will collapse like in 1929 - the powers of intervention by the government are infinitely higher now than in 1929.

Wed, 02/12/2014 - 05:12 | 4427236 thestarl
thestarl's picture

Suppose while the petrodollar is in place who knows?

Tue, 02/11/2014 - 22:10 | 4426374 FMR Bankster
FMR Bankster's picture

Tell that to the poor bastards who saw their Nasdaq stocks drop from 5200 to 1100. Or the folkes who held their S&P 500 stocks from 1550 all the way down to 666. Or for that matter holders of stocks in Japan at 39,000 still waiting to get even 25 years later. Goverments were printing like crazy and driving rates to the floor in all three examples and it did nada for stocks. Sh*t happens and when it does the people become very, very concerned. And they dump assets and pay down debt. They can print their a** off and it may work for a while but I wouldn't count on it.

Tue, 02/11/2014 - 19:37 | 4425767 logicalman
logicalman's picture

Doesn't this just prove that the 'markets' are bullshit?

 

Wed, 02/12/2014 - 07:05 | 4427323 Dr. Sandi
Dr. Sandi's picture

You needed proof?

Tue, 02/11/2014 - 16:49 | 4425027 El Tuco
El Tuco's picture

@JustObserving

 

 

+100

Tue, 02/11/2014 - 16:40 | 4424988 Doubleguns
Doubleguns's picture

That power depends upon folks having faith in the currency. No faith no power. Faith seems to be waining rapidly and once it goes they can print all they want it will not help. 

Wed, 02/12/2014 - 06:38 | 4427302 Dr. Sandi
Dr. Sandi's picture

You can hypnotize my neighbor to believe that rusted freeway bridge will last forever.

You might hypnotize me to believe that rusted freeway bridge will last forever.

The trick is to hypnotize that rusted freeway bridge to last forever.

The ongoing removal of support for our various facets of civilization's infrastructure allows entropy to overtake us.

That is why it CANNOT last forever, no matter how deep the level of 'faith.'

Tue, 02/11/2014 - 17:58 | 4425308 halfawake
halfawake's picture

Hate to break it to you, but I'd have to say that over 90% of americans have 100% faith. The whole cognitive dissonance thing, you know.

Tue, 02/11/2014 - 21:05 | 4426079 Tall Tom
Tall Tom's picture

Hate to break it to you but Americans are swimming in an Ocean of Debt. THEY HAVE NO FUCKING MONEY.

 

So it is obvious that the AMERICAN PUBLIC will not be playing the role of the Weimar Republic Peasants in fueling the HYPERINFLATION.

 

So what the FUCKING AMERICANS BELIEVE JUST DOES NOT MATTER. IT IS MOOT.

 

It is far more IMPORTANT to consider JUST WHAT the people WHOM HOLD THE US DOLLARS...THE FOREIGN CENTRAL BANKS...BELIEVE.

 

They are not as Brain Dead as the American Public.

 

When the Foreign Central Bankers LOSE CONFIDENCE IN THE DOLLAR, and SINCE THEY HOLD THE GOD DAMNED DOLLARS, then THEY WILL PLAY THE ROLE OF THE WEIMAR GERMAN PEASANTS...AND DIVEST OF THOSE DOLLARS ALL AT ONCE.

 

THEN ALL HELL WILL BREAK LOOSE. 

 

The first ones to DIVEST will GET SOMETHING. The last ones out will BE LOSERS.

 

It will be a RACE to DIVEST OF THE US DOLLARS FIRST.

 

It will go off like a BOMB.

 

ALL OF THOSE DOLLARS WILL COME BACK TO AMERICAN SHORES and start an UNPRECEDENTED HYPERINFLATIONARY INFERNO.

 

95% of Americans will DIE as a result. They have NOTHING. THEY ARE IN DEBT. They will not even know what hit them.

 

YOU WILL SEE FAMINE IN AMERICA.

 

IT IS NOT ALL ABOUT AMERICA. WAKE THE FUCK UP!!!

 

There is a REAL WORLD OUT THERE.

 

DO...YOU...GET...IT...YET???

 

WE...ARE..FUCKING...DOOMED.

 

There is NO WAY OUT.

 

The CPI will read EXTREME DEFLATION as the NON ESSENTIAL GOODS THAT IT TRACKS wil plummet into the ground.

 

The FED will respond by Printing MOAR Money to combat the "Deflation"

 

Meanwhile prices for essential Goods and Services will SOAR.

 

LMAO.

Wed, 02/12/2014 - 11:10 | 4427865 halfawake
halfawake's picture

tall tom, i'm certainly not insinuating that a collapse is not in the books, it is. but i think we at ZH underestimate the sheer volume of american cognitive dissonance, and how long they WILL play the fiat game, even if hyper inflation / deflation occur. They're too conditioned to trust their "leaders". Thusly, most wouldn't recognize a collapse if it hit them in the face (sitting in a fema camp watching american idol on their obamaPad eating mcd's handed to them by dhs).

 

Face it, we are sitting smack dead in an era of apex apathy and/or ignorance of how things run and what is going on behind the scenes. That's all I'm saying.

Wed, 02/12/2014 - 06:15 | 4427286 Global Observer
Global Observer's picture

The foreign holders of US$ can't just "dump" them, they would need to exchange them for something. Since they are holding US$ in order to pay for trade between themselves and not necessarily with the US, they can "dump" US$ only if they choose to use another currency to pay for trade between themselves. Given the currency swap arrangements between US, Canada, UK, EU, Switzerland and Japan, any large move of forex reserves from one currency into another will make the concerned Central Bank to step in and maintain the exchange rate within a band. So all those currencies will sink or sail together and there isn't an alternative national/regional currency to inspire the confidence of everyone outside the bloc.

However should a fiat currency meant exclusively for trade between nations come into existence that initially exchanges the forex reserves of the participating countries into the new currency at a fixed exchange rate and later allows it to float against the currencies of non-participating currencies (participating countries can decide whether to float or fix their domestic currency against the new international currency), then the US$ will plummet in value against this currency. All imported items including those available at Walmart will become extremely expensive that could begin the hyperinflation in the US.

Wed, 02/12/2014 - 07:06 | 4427317 Dr. Sandi
Dr. Sandi's picture

The 'axis of evil' will continue to use their excess T Bills to pay off their bills for multi-billion buck infrastructure projects.

Build a dam in Africa, pay for it with US Tragedy notes. Buy a diamond mine, pay for it with US Tragedy notes. Buy half of a global oil company, pay for it with US Tragedy notes.

It's going on now, it will keep going on for as long as they can keep unloading that crap. When the Chinese, Russians, et al are done, those T-Notes end up back here looking for somebody stupid enough to buy them. MyRA anybody?

Sure, Chineskis will get stuck with some of it when the music stops. But most of it will end up at its point of origin, the US Treasury, who made the original promise to pay it back someday. By then it won't be worth a damn and nobody will buy any more of it, not even the Fed.

The Chinese will own half of the production and resources of Africa and South America, the Russians will own what's left, and the Americans will have all the I.O.U.s that made it possible safely gathering dust at the treasury.

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