1936 Redux - It's Really Never Different This Time

Tyler Durden's picture

While chart analogs provide optically pleasing (and often far too shockingly correct) indications of the human herd tendencies towards fear and greed, a glance through the headlines and reporting of prior periods can provide just as much of a concerning 'analog' as any chart. In this case, while a picture can paint a thousand words; a thousand words may also paint the biggest picture of all. It seems, socially and empirically, it is never different this time as these 1936 Wall Street Journal archives read only too well... from devaluations lifting stocks to inflationary side-effects of money flow and from short-covering, money-on-the-sidelines, Jobs, Europe, low-volume ramps, BTFD, and profit-taking, to brokers advising stocks for the long-run before a 40% decline.

Things look eerily similar eh?


But when we look at the headlines in the Wall Street Journal from mid 1936 to mid 1937 as the market topped out (orange oval), dipped, was bought back, then collapsed 40% in 3 months, nothing ever changes...


Government Bailouts Repaid - Bullish Implications...

N.Y. Central Has Repaid All Government Loans
The Wall Street Journal, 978 words
Dec 1, 1936
WASHINGTON Numerous railroad developments here yesterday were climaxed by the announcement of RFC Chairman Jesse H. Jones that New York Central had repaid all of its government loans, totaling $16,858,950, most of which was not due until 1941.

The Buying Is Not Speculation - Cash On The Sidelines...

It's Cash Bull Market With Little Inflation, Says Exchange Bulletin
The Wall Street Journal, 169 words
Dec 16, 1936
"This is eminently a cash market, and as such is relatively devoid of that major characteristic of speculative inflation, the use of borrowed money." says the December Bulletin of the N.Y. Stock Exchange.

Inflationary Side-Effects - Buy It All It's Going Up...

Wheat Prices Soar To 7-Year Highs On Heavy Buying Stimulated by Broad Advances in Foreign Pits
The Wall Street Journal, 1497 words
Dec 19, 1936
CHICAGO An avalanche of buying, encouraged by buoyancy in foreign markets, particularly in Winnipeg, swept wheat prices to the highest levels since December, 1929, Friday.


But... 3 days before...

The Wall Street Journal, 1027 words
Dec 16, 1936
As commodity prices continued to advance yesterday to the accompaniment of increasing public speculation in futures markets, signs of a feeling of caution appeared from widely separated centers.

As Goes The US So Goes The Rest Of The World...

London Trade Stimulated By Wall Street Strength; Averages at New Highs
The Wall Street Journal, 859 words
Nov 6, 1936
LONDON Overnight strength in Wall Street considerably stimulated the stock market yesterday. Dealers again arrived earlier than usual in anticipation of activity in international issues and found large buying orders in these stocks awaiting execution.

Global Economy To Lift Stocks...

London, New York Stock Transactions Largest in Months - British Brokers Stand in Queues to Fill Orders Activity Ascribed to World Efforts to Revive Trade
The Wall Street Journal, 956 words
Oct 8, 1936
Growing realization that the determined international effort now being made to sweep away trade barriers will be followed by improved business conditions throughout the world brought a rush of business to the security markets in New York and London yesterday such as not been seen for months.

Devaluation Always A Winner... (Market Prices Prove Economy Likes It)

Wall Street Weighs Devaluation Effects On U.S. Markets; Sees Little Likelihood of Dumping

 The Wall Street Journal, 1759 words
Sep 28, 1936
Rising security and commodity markets Saturday gave ample indication of the financial district's "bullish" interpretation of the U.S. Anglo-French monetary agreement.

Markets Cheerful Over Devaluation; Morgenthau Not Afraid of Dumping
Selective Buying Here and Abroad Motors and Other Shares Held To Benefit From Improved World Trade Are Strong Commodities Less Responsive International Markets
The Wall Street Journal, 1726 words
Sep 29, 1936
A note of cautious optimism was sounded by leading stock exchanges of the world which were open for business yesterday.

Equity Valuations Irrelevant...

Earnings Yield of 15 Stocks 4.8%, Compared with 9.4% Ten Years Ago
The Wall Street Journal, 1280 words
Aug 7, 1936
Industrial earning power is valued nearly twice as highly in the current stock market as it was ten years ago.

Europe Ever The Optimist Even In The Face Of Dismal Reality...

France Optimistic Despite Continuing European Tension - Growing Franco-English Cooperation Inspires Confidence
The Wall Street Journal, 652 words
Dec 5, 1936
Despite the unabated international tension and sudden menace of a constitutional crisis in Great Britain, the continuance of quarrels between Right and Left wings of the Popular Front, and the persistent antagonism between employers and labor, the general feeling in France is rather optimistic than pessimistic.

Short Covering As Ever...

Active Short Covering Sweeps Grain Prices To New High Levels - Chases Bears
The Wall Street Journal, 1345 words
Dec 2, 1936
New highs for the season were recorded in wheat, corn, rye and oats Tuesday. Spot red winter wheat advanced to the highest level since February, 1929. The sharp upturn, which boosted December corn almost 5 cents, and December wheat about 3 cents, was due principally to short covering by those made uneasy over the sale of an unusually large quantity of spot wheat out of local store, and by generous snowfall over the grain belt. Early in the session the market ruled easy on reports of rain and snow, and predictions for continued unsettled weather.

Government Spending Cuts Cause Concern...

Sabotaging Federal Economy
The Wall Street Journal, 412 words
Dec 5, 1936
Even the modest beginning which is attempted by WPA officials to reduce cost of government by cutting down the relief roles is encountering strong opposition. It is perhaps only natural that the workers themselves should object, although their methods of protesting through "sitdown" strikes, not to mention the violence which has manifested itself, may be open to question. But much more ...

States And Taxes...

Sales Tax Repeal May Unbalance Kentucky Finances
The Wall Street Journal, 1002 words
Jan 14, 1936
LOUISVILLE, Ky.--Repeal of Kentucky's 3% sales tax, effective the moment Governor Albert B. Chandler signs it, probably Wednesday will deprive the state of $3,500,000 of revenue budgeted to the expiration of the biennium ending June 30, 1936 and the counties of $1,750,000.

The Foreign Money Will Save Us...

Financial Centers Expect Greater Foreign Interest in Our Securities As Congress Delays Alien Tax Boost - Foreign Interest Here
The Wall Street Journal, 765 words
Aug 6, 1937
Some resumption of foreign interest...

Money On The Sidelines...

The Wall Street Journal, 590 words
Jul 1, 1937
While the Street remains in a cautious frame of mind, there are undoubtedly more possible buyers than sellers around, and it would not take a lot of encouragement to get these gentlemen aboard. Feeling in brokerage circles is that stocks are more likely to advance on any break in the unpleasant headlines these days than to decline far on a continuation of current uncertainties.

Jobs And Europe never far from fear...

The Wall Street Journal, 683 words
Jun 29, 1937
Certainly the market was more active on the downside, which surprised a lot of traders who had expected otherwise. The labor and foreign situations remain the main factors in the picture, and brokers feel that these have not changed one whit for the better thus far.

Buy The F##king Dip...

The Wall Street Journal, 508 words
Aug 24, 1937
A rather depressed feeling is extant in Wall Street as small volume and lower prices continue. Yet there are not many bears in the Street so far as the long pull is concerned. Traders still are stubborn in their theory that stocks are reactionary at the moment from lack of interest rather than any important liquidation. This is the period of the year when business takes a final breathing spell before the more active Fall and some think the stock market is doing likewise and that better days are ahead.

Rallies had Real Volume Then - No Low Volume Ramps...

The Wall Street Journal, 564 words
Aug 16, 1937
If Saturday's volume was any indication, revived interest in the stock market is here in the opinion of the Street. Furthermore the scope of trading Friday and Saturday indicated a broadening interest which included medium priced as well as low priced issues on contrast to the extended period wherein so-called "quality" stocks held sway in a limited market with small volume.

And At The Top... Brokers Suggest Stocks For The Long-Run (based on 'expectations')

The Wall Street Journal, 665 words
Aug 7, 1937
Profit taking for the week-end brought prices down in yesterday's market, but the undertone remained steady and brokers said there was nothing important in the character of the selling. Many houses were advising the purchase of favored issues on any further reactions. Metal shares ended the day with advances in many cases. There was impressive buying reported in the copper issues largely for long pull purposes.

The Wall Street Journal, 649 words
Aug 10, 1937
While volume left much to be desired, the expectation of stronger and more active markets continued to pervade Wall Street. Moreover, the general business picture is regarded as more pleasing than at any time since the so-called Summer "lull" came into force. Incidentally, the seasonal letdown thus far has not proved to be as extensive as many predicted and expected. Brokers say that many clients are away and that there are others who will be replacing their sold-out long positions in coming weeks.

See - it really is never different this time. It merely appears so since - as Kyle Bass so eloquently noted, the brevity of financial memory is about two years...


(h/t @ParagonCap)

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ACP's picture

Oh it's different this time. The bigger the bubble, the bigger the...


PhattyBuoy's picture

Not to worry, Benny & the Jets have the $1.2 quadrillion derivatives market backstopped for us all ..

SafelyGraze's picture

ok, just to be clear ..

you're saying buy the dips in s&p, then hold until 2014

or are you saying to short the dow to hedge against the s&p long

sometimes these headlines are kinda ambiguous

hannah's picture

buy the fucking dipand hold til '41....1941..?.....no...3041 that is,,,LOL

prains's picture

you say 1936 I say it's more like August 1939 but who's counting

Boris Alatovkrap's picture

"Idiot is fail learn history, doom is to repeat" - Yorge Santayana

prains's picture

"Big are the balls of the man who must carry them over his shoulder" - Prains 2013

The Heart's picture

Ingorance is not my master...it is my slave.

Supernova Born's picture

It really is different. It is worse. A huge number of Americans have no ability to provide for themselves, no extended family and no legacy of dealing with anything more than applications (filled out by social workers) to qualify for free food, housing and medical care.

The underclass has increased in size dramatically and the only thing they have enhanced is their sense of entitlement.

And those other minor differences: nuclear weapons, ballistic missiles, EMP devices, and bio-engineered pathogens.

Those weapons are the lid which has caused the pot (now a pressure cooker) to boil far hotter and far longer than ever before in human history.

It can't merely boil over at this point. It can only explode.

Boris Alatovkrap's picture

Boris is remember time work  for Ministry of Information, melt down glycerin from banned films. Lesson, do not let boil. Most of facial hair is now grow back, but gaps in eyebrow. 

GetZeeGold's picture



CNBC is going to interview the last shoeshine boy on Wallstreet today....word is he's bullish.

ratso's picture



GetZeeGold's picture



You don't have a bunker yet?

eclectic syncretist's picture

It is different this time, cause this time we are full on counterfeiting our way to prosperity bitchez.  Damn the constitution, full printer speed ahead!

thewhitelion's picture

Lost mine in a boating accident.

miker's picture

Very interesting insight.  I have often wondered what would result from decades of "containing" bad things from happening.  Seems like history proves human nature eventually wins out.  Your thesis of exploding versus boiling may be spot on. 

El Viejo's picture

For a wonderful comparison of this Fiscal Cliff with the one in 1937 see Steve Keen's presentation before congress in Dec of 2012:


  He predicted the crash long before anyone else and has received accolades from all over the world for it. Congress, of course, is so full of themselves they could not learn from this man.

Reptil's picture

that's what the FEMA camps are for. "political dissidents" will be everyone apart from the ringleaders of the ponzi.


they're not "temporary refugee camps" (refugees don't need barbed wire pointed inwards, they're happy with anything (but)

they're not "long term replacement camps" (there's no infrastructure to provide food etc.)


Pol Pot did it (murdered most of Cambodja's adult population, because of "differences" with help of brainwashed children.

so why wouldn't the petrodollar mafia be able to?


augustusgloop's picture

great point. unliike depression 1.0, we now have far fewer farmer in US. And those that do are paid not not to farm / paid to mono-crop by USDA. where will all the hobos go this time around.

Boris Alatovkrap's picture

Interesting... Obama, Bernanke, Geithner, et al is bear no burden on own shoulder.

GetZeeGold's picture



"9 trillion in debt is unpatriotic. I'll cut the deficit in half" - Unknown

Terminus C's picture

- Unknown

Only because his birth certificate was forged.

Watts_D_Matter's picture

Big is the stick of a man who draws a line between his footsteps.....Penis Erectis 1755

BurningFuld's picture

Gladly pay you Tuesday for a hamberger today. Wimpy 1963

francis_sawyer's picture

Mind if there's any horsemeat in it?

Dexter Morgan's picture

If my aunt had balls she'd be my uncle.

Boris Alatovkrap's picture

You are periodically high jack thread, no?

akak's picture

Only when period she is having.

Doing explaining of down arrow for Boris also.

TheFourthStooge-ing's picture

Must do concede comment having a point.

Boris Alatovkrap's picture

Ha, ha, Boris is see what you do there! Boris is give up arrow!

BurningFuld's picture

You mean:

Down arrow is explaining you.

Winston Churchill's picture

1913, and there will not be anybody left who can count.

Go Tribe's picture

What did they say about gold and silver back in 1936? Cause those two metals are sure sucking wind today.

Terminus C's picture

Nobody cares about the "price" today, or tomorrow.  The gold is for when the "price" is no longer denominated in $

When you understand that, you understand gold.

WonderDawg's picture

If I'm accumulating and the "price" tomorrow is lower than the "price" today, I care, because I can accumulate more tomorrow than I can today for the same $.

When you understand that, you understand the reason I care about the $.

Terminus C's picture

This is true, but the overarching rationale for holding gold is that the dollar is dead (or will be).  If you keep waiting for the "price" to drop you may find yourself out of an opportunity to accumulate. 

Beam Me Up Scotty's picture

"If you keep waiting for the "price" to drop you may find yourself out of an opportunity to accumulate"

Its the same reason the DOW keeps going UP.  People all think they can top tick the market and get out before it tanks.  Then they will wait for the DOW to rise again before they sell, meanwhile they ride it down 40% because they couldnt think that it would fall that far.

They opposit is true for gold.  If you don't have a position in physical, you better start building one right now.

francis_sawyer's picture

As soon as I 'top tick' the DOW ~ I'll turn around and buy some gold coins... [That's the TARD logic]...

MachoMan's picture

The only case you just made was for gold to go down, i.e. follow stocks.  The reality is that there is no sure bet...  I realize people have a lot of conviction on the gold gamble (myself included), but it is NOT a sure bet...  it may be subject to incredible depreciation before any moonshot.  Hedge accordingly.

Terminus C's picture

Exactly this.  Not all of my assets are gold, because I, like all of you - despite some protestations to the opposite, cannot predict the future.  One possible future is that the dollar dies (we can argue until the cows come home on the probability but in the end we are all just guessing) thus I hold some physical.  The physical is not a trade, ergo I do not care about the "price".  The physical is insurance against counterparty full retardation.


SilverDOG's picture




You are swallowing the fiat currency legacy, deeply.

Amusing is, worshipping of, guaranteed failure.

WonderDawg's picture

I don't think I'd go that far. But if I listened to all the gold bugs here on this site when gold was at $1800+ and everyone was absolutely certain it was going to $5000 by the next month, I'd be a little pissed off right about now. They were very very wrong. The psychology was plain to see, it was a brief mania. It ain't the end of the world yet, bro. My $ still buy things, including gold. That's not going away any time soon, despite what many here would have you believe. Gold will see $1400 before it sees $2000 is my guess. I could be wrong, but I'm willing to take that chance. If the price action indicates it's going to the moon, I'll go all in. Until then, no. That mania will return eventually, and I plan to ride that train, but it's not an all-in right now scenario. Patience is required to maximize purchase potential.

Hell, I still remember the dude that when silver was at $45 and everyone here was just absolutely certain it was going straight to $100, this dude sold everything he had and maxed out his credit to go all in on silver. That poor bastard is probably living under a bridge right now.

mind_imminst's picture

Exactly, Bennie and the Jets are going to print to infinity. This time is different. The currency will get crushed before stocks are allowed to fall.

El Oregonian's picture

"Oh it's different this time. The bigger the bubble, the bigger the...



ACP's picture


Or better yet...


"That's a wonderful Keynesian bubble the Fed is blowing...

      ...for me to poop on!"

xtop23's picture

Your post is a "Triumph" , sir.

All time highs, massive leverage, insane over-valuations, and pitiful global growth.

Everything's fine.

Wonder when they'll get crackin' with those 2700+ domestic tanks and hard tyranny to distract us from the brokers diving out of skyscraper windows.

( side-note ) - "The penis is evil, the gun is good!"..... crazy movie .... I loved Zardoz as a kid.

Bicycle Repairman's picture

Zardoz definitely opened my mind.

francis_sawyer's picture

Charlotte Rampling was hot [in her youth]...

max2205's picture

Funny....theres always the next crash on this site.  Lets see how ben the magician fares.