This page has been archived and commenting is disabled.

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)

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 03/14/2013 - 00:06 | Link to Comment ACP
ACP's picture

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

...POP!!!

Thu, 03/14/2013 - 00:20 | Link to Comment PhattyBuoy
PhattyBuoy's picture

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

Thu, 03/14/2013 - 00:31 | Link to Comment SafelyGraze
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

Thu, 03/14/2013 - 00:44 | Link to Comment hannah
hannah's picture

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

Thu, 03/14/2013 - 00:54 | Link to Comment prains
prains's picture

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

Thu, 03/14/2013 - 01:10 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

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

Thu, 03/14/2013 - 01:26 | Link to Comment prains
prains's picture

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

Thu, 03/14/2013 - 02:55 | Link to Comment The Heart
The Heart's picture

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

Thu, 03/14/2013 - 03:24 | Link to Comment Supernova Born
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.

Thu, 03/14/2013 - 04:17 | Link to Comment Boris Alatovkrap
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. 

Thu, 03/14/2013 - 08:21 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

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

Thu, 03/14/2013 - 08:37 | Link to Comment ratso
ratso's picture

OMG - THE SKY IS FALLING IN A 1936 VERRSION.

SELL EVERYTHING AND BUY A BUNKER

Thu, 03/14/2013 - 08:44 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

You don't have a bunker yet?

Thu, 03/14/2013 - 10:33 | Link to Comment eclectic syncretist
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!

Thu, 03/14/2013 - 10:42 | Link to Comment thewhitelion
thewhitelion's picture

Lost mine in a boating accident.

Thu, 03/14/2013 - 08:22 | Link to Comment miker
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. 

Thu, 03/14/2013 - 10:08 | Link to Comment El Viejo
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:

http://www.debtdeflation.com/blogs/2012/12/11/briefing-on-the-fiscal-cliff-at-congress/

  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.

Thu, 03/14/2013 - 09:42 | Link to Comment Reptil
Reptil's picture

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

https://www.youtube.com/watch?v=FfkZ1yri26s

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?
http://www.whiteoutpress.com/articles/q42012/homeland-security-graduates...

 

Thu, 03/14/2013 - 09:58 | Link to Comment augustusgloop
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.

Thu, 03/14/2013 - 04:19 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

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

Thu, 03/14/2013 - 08:25 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

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

Thu, 03/14/2013 - 09:10 | Link to Comment Terminus C
Terminus C's picture

- Unknown

Only because his birth certificate was forged.

Thu, 03/14/2013 - 08:00 | Link to Comment Watts_D_Matter
Watts_D_Matter's picture

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

Thu, 03/14/2013 - 09:45 | Link to Comment BurningFuld
BurningFuld's picture

Gladly pay you Tuesday for a hamberger today. Wimpy 1963

Thu, 03/14/2013 - 09:58 | Link to Comment francis_sawyer
francis_sawyer's picture

Mind if there's any horsemeat in it?

Thu, 03/14/2013 - 09:55 | Link to Comment Dexter Morgan
Dexter Morgan's picture

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

Thu, 03/14/2013 - 02:55 | Link to Comment The Heart
The Heart's picture

.

Thu, 03/14/2013 - 04:19 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

You are periodically high jack thread, no?

Thu, 03/14/2013 - 04:28 | Link to Comment akak
akak's picture

Only when period she is having.

Doing explaining of down arrow for Boris also.

Thu, 03/14/2013 - 05:09 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Must do concede comment having a point.

Thu, 03/14/2013 - 11:38 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

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

Thu, 03/14/2013 - 09:51 | Link to Comment BurningFuld
BurningFuld's picture

You mean:

Down arrow is explaining you.

Thu, 03/14/2013 - 10:37 | Link to Comment Winston Churchill
Winston Churchill's picture

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

Thu, 03/14/2013 - 08:05 | Link to Comment Go Tribe
Go Tribe's picture

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

Thu, 03/14/2013 - 08:28 | Link to Comment Terminus C
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.

Thu, 03/14/2013 - 08:54 | Link to Comment WonderDawg
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 $.

Thu, 03/14/2013 - 09:07 | Link to Comment Terminus C
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. 

Thu, 03/14/2013 - 09:19 | Link to Comment Beam Me Up Scotty
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.

Thu, 03/14/2013 - 10:00 | Link to Comment francis_sawyer
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]...

Thu, 03/14/2013 - 10:05 | Link to Comment MachoMan
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.

Thu, 03/14/2013 - 10:14 | Link to Comment Terminus C
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.

 

Thu, 03/14/2013 - 09:40 | Link to Comment SilverDOG
SilverDOG's picture

WonderDawg,

 

 

You are swallowing the fiat currency legacy, deeply.

Amusing is, worshipping of, guaranteed failure.

Thu, 03/14/2013 - 20:06 | Link to Comment WonderDawg
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.

Thu, 03/14/2013 - 03:00 | Link to Comment mind_imminst
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.

Thu, 03/14/2013 - 00:25 | Link to Comment El Oregonian
El Oregonian's picture

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

...POOP!!!"

Fixed...

Thu, 03/14/2013 - 00:32 | Link to Comment ACP
ACP's picture

Nice.

Or better yet...

 

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

      ...for me to poop on!"

Thu, 03/14/2013 - 01:48 | Link to Comment xtop23
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.

Thu, 03/14/2013 - 06:29 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

Zardoz definitely opened my mind.

Thu, 03/14/2013 - 10:03 | Link to Comment francis_sawyer
francis_sawyer's picture

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

Thu, 03/14/2013 - 06:47 | Link to Comment max2205
max2205's picture

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

 

 

Thu, 03/14/2013 - 00:30 | Link to Comment PC Load Letter
PC Load Letter's picture

Nice work putting this together ZH - scary how some things never change

Thu, 03/14/2013 - 01:14 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

"Plus ca change

Plus c'est la meme chose"

- Popular Rushian Band

Thu, 03/14/2013 - 10:06 | Link to Comment Groundhog Day
Groundhog Day's picture

Their are a few differences, 702 trillion of them

Thu, 03/14/2013 - 00:06 | Link to Comment realtick
Thu, 03/14/2013 - 00:09 | Link to Comment francis_sawyer
francis_sawyer's picture

Do humans actually trade stocks anymore?

~~~

Sincerely,

POPE FRANCIS

Thu, 03/14/2013 - 01:55 | Link to Comment Likstane
Likstane's picture

Congrats on the new job.  Maybe you can get crackin' on moving some of those Jews outta the Vatican...oops, sorry, wrong cult. 

Thu, 03/14/2013 - 09:13 | Link to Comment resurger
resurger's picture

lol

Thu, 03/14/2013 - 00:10 | Link to Comment Mr. Magoo
Mr. Magoo's picture

"Those who cannot remember the past are condemned to repeat it." - George Santayana

"Those that fail to learn from history, are doomed to repeat it" Winston Churchill

Take your pick

 

Thu, 03/14/2013 - 00:14 | Link to Comment ABG LINE
ABG LINE's picture

Sell in May and go away.

Thu, 03/14/2013 - 06:37 | Link to Comment Ratscam
Ratscam's picture

+1
Does the above chart indicate that we will see WW3 in 2017?
The analogies are frightening. Currency wars, trade wars, real wars.

Thu, 03/14/2013 - 00:15 | Link to Comment chump666
chump666's picture

"dipped, was bought back, then collapsed 40% in 3 months,"

A feasible redux.


 

Thu, 03/14/2013 - 09:22 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

The dip in May, bought back in the summer, and collapse in October?

Thu, 03/14/2013 - 00:16 | Link to Comment realitybiter
realitybiter's picture

Bondonomics

 

You can drive it off the lot.

Maybe for a while.

But sooner.  Rather than later.

the wheels will start to wobble,

the engine sputter and knock,

and a used bond salesman somewhere will smile.

hard stop.

sucka!

Thu, 03/14/2013 - 00:16 | Link to Comment nicoacademia
nicoacademia's picture

closer to ezekiel 38

Thu, 03/14/2013 - 05:39 | Link to Comment Rogue Trooper
Rogue Trooper's picture

+1 that's exactly how feel...

Thu, 03/14/2013 - 09:02 | Link to Comment gmrpeabody
gmrpeabody's picture

Boris..., is that you?

Thu, 03/14/2013 - 00:17 | Link to Comment NoWayJose
NoWayJose's picture

I can envision 1930's investors huddled around their big radio sets, listening to CNBC Radio, and some guy named Cramer yelling "Buy, buy, buy"!

Thu, 03/14/2013 - 06:53 | Link to Comment max2205
max2205's picture

Back then the sheep were led to slaughter by the wsj and a paragraph if that in their local rag

 

Today we have 1000 papers saying the same government bs but the internet offers some light

 

Zh will live on unless droned

Thu, 03/14/2013 - 00:16 | Link to Comment Master_Blaster
Master_Blaster's picture

History is right 100% of the time, but this time it's different. Can't wait for the history books on this one.

Thu, 03/14/2013 - 08:16 | Link to Comment Rip van Wrinkle
Rip van Wrinkle's picture

The winners will write the history. Just make sure the right side wins.

Thu, 03/14/2013 - 00:18 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

History doesn't repeat, but in rhymes.

We seem to be making the same policy mistakes as the first time around.  Bad monetary policy, bad tax policy, bad fiscal policy, boiling international trouble ignored by an inept President....

 

Thu, 03/14/2013 - 00:18 | Link to Comment Calc
Calc's picture

Wish I had gotten in back at Dow 190 in the Summer of 1937...

Thu, 03/14/2013 - 00:31 | Link to Comment Calc
Calc's picture

Actually only comes to 5.865% compounded return over the last 76 years (not including dividends) to Dow 14,450 so maybe the run wasn't so hot.

Thu, 03/14/2013 - 03:48 | Link to Comment Better_late_tha...
Better_late_than_never's picture

You forgot inflation.

Thu, 03/14/2013 - 05:42 | Link to Comment Rogue Trooper
Rogue Trooper's picture

So in 'hard money' terms the DOW would be, say, 192?

Good work over 76 years Amerika!

<Back of envelope>

Thu, 03/14/2013 - 09:24 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

And how much has the gold you buried in your backyard appreciated since then?

Thu, 03/14/2013 - 00:23 | Link to Comment El Oregonian
El Oregonian's picture

Hey, I had a 1936 Plymouth Business Coup once, fine piece of machine. Of course that was when we still had manufacturing industries here. Now, not so much. 49.8% on some sort of gov't subsidy, the avg. hours are 26 per week and mostly service oriented. Yup, I'm sure that free upgrades on the Titanic seemed like a wonderful thing at the time... Until the sound of scraping ice...

Thu, 03/14/2013 - 00:38 | Link to Comment Essential Nexus
Essential Nexus's picture

I thought it was supposed to be like 1987?

 

Thu, 03/14/2013 - 00:52 | Link to Comment Pure Evil
Pure Evil's picture

Well, at least in 1987, it only lasted a day. This travesty been playing since 2000.

Thu, 03/14/2013 - 01:00 | Link to Comment Bear
Bear's picture

1987 must have been like 1936 ... well not exactly, but Gulf WAR was four years in the future just line 1936 where WAR was four years in the future ... Beware the Ides of March (2017)

Thu, 03/14/2013 - 00:40 | Link to Comment Juggernaut Nihilism
Juggernaut Nihilism's picture

Wow.  As if I needed another push, this article provided the shove.  I am the fuck out of these markets until the dust settles.

Thu, 03/14/2013 - 01:03 | Link to Comment daedon
daedon's picture

you believe in reincarnation?

Thu, 03/14/2013 - 06:50 | Link to Comment Tenshin Headache
Tenshin Headache's picture

"The only way to win is to not play."

And even that is sketchy.

Thu, 03/14/2013 - 01:03 | Link to Comment DonutBoy
DonutBoy's picture

What a fascinating post.  Great work

Thu, 03/14/2013 - 01:43 | Link to Comment adr
adr's picture

Just like then as it is now. The money managers pumped the market to enrich the few, allowing the upper crust to afford all types of luxury again after the scare of two months in 1929.

Bernanke studied the depression, not how to prevent one, but how the Fed was able to safeguard the wealth of the 1%. His mission is to maintain the gains for the wealthy at the expense of the working class.

As employment and sales cratered in the great depression, allowing the most corrupt business to buy up the competition, Bernanke needed to create the same situation today.

United merging with Continental, American with US Air. Priceline buying Kayak, Tech mergers, Pharma mergers, etc. Major stockholders make a killing, millions lose jobs.

Bernanke and the rest of the 1% didn't want to prevent a depression, they wanted to make sure we entered one. Depressions are money machines for the wealthy.

Thu, 03/14/2013 - 01:58 | Link to Comment q99x2
q99x2's picture

Bernanke student of the great depression. He's pretty good. Got it almost perfect. He's no dummy.

Thu, 03/14/2013 - 02:05 | Link to Comment Lady Heather...UNCLE
Lady Heather...UNCLE's picture

wow...those who forget history are doomed to repeat it

Thu, 03/14/2013 - 02:46 | Link to Comment SunRise
SunRise's picture

Even those who remember history are doomed to repeat it.

Thu, 03/14/2013 - 03:01 | Link to Comment Wile-E-Coyote
Wile-E-Coyote's picture

Greed will make people do it again and again and again........... you get the drift.

Of course all this would stop if we just started executing bankers.

Thu, 03/14/2013 - 09:33 | Link to Comment petolo
petolo's picture

What history ?

Thu, 03/14/2013 - 02:06 | Link to Comment ebworthen
ebworthen's picture

LOL, too funny, I've been saying it since 2008, we are on course for the great depression.

Bernanke has forestalled it only, not prevented it, so strap on your suspenders and get ready.

Thu, 03/14/2013 - 02:07 | Link to Comment Lady Heather...UNCLE
Lady Heather...UNCLE's picture

so...seven years til the crash...we are only 4 years in...stay out of these bitching mofo markets if you are a bear

Thu, 03/14/2013 - 09:58 | Link to Comment Shell Game
Shell Game's picture

"we are only 4 years in"

The last bull market broke late 2007, meaning next year batten the hatches. Also coincides with John William's (shadowstats.com) prediction of hyperiflation by late 2014.  We crash UP, in a sickening way, then into the abyss.

Thu, 03/14/2013 - 02:09 | Link to Comment Lady Heather...UNCLE
Lady Heather...UNCLE's picture

what would George Washington have done with a Bernanke?   US citizens?  enquiring minds want to know

Thu, 03/14/2013 - 03:04 | Link to Comment ebworthen
ebworthen's picture

Andrew Jackson would have hung him for treason.

Thu, 03/14/2013 - 02:12 | Link to Comment Lady Heather...UNCLE
Lady Heather...UNCLE's picture

....and sorry to hog the thread, but what a magnificent post

Thu, 03/14/2013 - 03:16 | Link to Comment suteibu
suteibu's picture

LOL.  "Free trade" is going to save the world.  Sounds oddly familiar.  But it was more like trade in fire bombs and lead.

FDR paraphrasing GW Bush, "We have to destroy this world in order to save it."

Thu, 03/14/2013 - 04:18 | Link to Comment Supernova Born
Supernova Born's picture

Was that a ballistic missile launch directly off Los Angeles on the day QE 2 was announced?

China has their nuclear-armed mad dog proxy at the ready.

Senkaku was a misspelling on an early map of the islands. The islands' name is actually spelled Seppuku.

Japan may sweep the medals at the "nuked" Olympics.

Thu, 03/14/2013 - 03:31 | Link to Comment ebworthen
ebworthen's picture

Quick, send these historic headlines and dribbles of optimistic bullshit - which are IDENTICAL to todays talking points - straight to Bernanke and CNBC; do not pass go, do not collect $200.

Thu, 03/14/2013 - 03:44 | Link to Comment Lady Heather...UNCLE
Lady Heather...UNCLE's picture

'hanged him'

Thu, 03/14/2013 - 04:06 | Link to Comment Supernova Born
Supernova Born's picture

Some must be simply killed in the basement of ZH Fight Club with heavy hitters like the one that compiled this piece throwing the punches.

Thu, 03/14/2013 - 04:20 | Link to Comment Freaking Heck
Freaking Heck's picture

In 1936 they wouldn't have gotten away with expanding the FED's balance sheet like a supernova. Of course it'll burst/implode like a supernova should but the chart implies a defaltionay outcome. The Bernanke is ready to stop that.

Thu, 03/14/2013 - 04:20 | Link to Comment Freaking Heck
Freaking Heck's picture

In 1936 they wouldn't have gotten away with expanding the FED's balance sheet like a supernova. Of course it'll burst/implode like a supernova should but the chart implies a defaltionay outcome. The Bernanke is ready to stop that.

Thu, 03/14/2013 - 04:32 | Link to Comment Supernova Born
Supernova Born's picture

On 60 Minutes he stated he was 100% sure he could.

That's the exact moment I knew he was a complete idiot.

Thu, 03/14/2013 - 04:45 | Link to Comment Supernova Born
Supernova Born's picture

Grey box this piece of genius.

Truth in the rear view mirror is still truth.

Rod Serling: "Nan Adams, age twenty-seven. She was driving to California; to Los Angeles. She didn't make it..."

Thu, 03/14/2013 - 04:53 | Link to Comment akak
akak's picture

"Mr. Bernanke, you are obsolete!"

Thu, 03/14/2013 - 04:55 | Link to Comment bobbymak880
bobbymak880's picture

BEST EVER ZH ARTICLE!!!!  BRAVO!  Well-documented, well-written, informative and scary. 

Thu, 03/14/2013 - 05:39 | Link to Comment AGoldhamster
AGoldhamster's picture

Yes - and No.

Yes: because the facts look as if they fit.

NO: because the content is misleading. As the content is since months misleading. As the content suggests that Indices have to peak soon. As the content supports and induces bearish thinking.
Fact is - the DOW still goes up and up and up ... despite all the articles and divergences and this and that ... and finally all those bearish thinkers/traders/writers are just food for the market makers.
In other words - readers sentiment with all these articles is turning bearish and if they invest based on those articles - they are gonna loose.

As a trader - the time for short is not ripe yet.

Thu, 03/14/2013 - 05:00 | Link to Comment AGoldhamster
AGoldhamster's picture

Tyler - you finally got it - or still not.

First: this is what lies ahead for the DOW - according to the source I got this chart from. Note: the point of the chart is the timing - price is another story. But I guess the message is crystal clear.

Second: This is not about 1936 ... this is about 1929ff. In May this year Uranus is again where Indices peaked in 1929. So - the really STEEP decline is yet to come. Maybe not in terms of price (because our leaders are going to destroy our currencies for the sake of the DOW) - but sure in terms of sentiment and coming depression with all its aftermath.
fyi: Uranus is a slow moving planet with long lasting implications. The majority of the coming depression/decline will be because of Uranus. Just think of what happend everywhere on this planet after 1929ff. In that light - the European story is nothing but a deja vu. The more things change the more the remain the same. Or do you think those unemployed in Southern Europe in the end will behave different than in 1929ff??? It's already underway - just not visible for most.

Third: mark the dates 05-05-2013 (+ / - 2 weeks) and 02-02-2016 (+/- 2 weeks).

Thu, 03/14/2013 - 05:02 | Link to Comment akak
akak's picture

Personally, I think you are just pulling numbers out of Uranus.

Thu, 03/14/2013 - 05:08 | Link to Comment Supernova Born
Supernova Born's picture

It reads like a Turing Test response, IMO.

Thu, 03/14/2013 - 05:44 | Link to Comment AGoldhamster
AGoldhamster's picture

I understand your reaction - as there are a zillion of top callers out there - and they all are/have been dead wrong.

Thu, 03/14/2013 - 05:53 | Link to Comment Supernova Born
Supernova Born's picture

Aside... I decided to be pulled like a greyhound by a fake bunny down the rabbit hole.

Of all the planets, Jupiter exerts the greatest gravitational pull on the Earth. However, this pull is only 0.0000068 times the gravitational pull of the moon.

Uranus exerts .05 of the pull of Jupiter on the Earth. So 1/20 of .0000068 of the gravitational pull of the Moon on the Earth guides your investing?

Sheep, wolves and those baying at .05 of .0000068 of the gravity of the moon.

Thu, 03/14/2013 - 06:02 | Link to Comment Orly
Orly's picture

All those small nuances add up to alter our personal "grids."

You'd be amazed at what a small impulse can do to change an environment.  Besides, it prolly has nothing at all to do with gravity, but something we don't even understand yet.

All I am saying is, don't pooh-pooh it out of hand.

:D

Thu, 03/14/2013 - 07:01 | Link to Comment BandGap
BandGap's picture

I've seen better work on an Etch-A-Sketch. Using astrology to predict the market is sheer folly, or not. My advice is to stop trying to anticipate narrow events and prepare for the broader, longer lasting outcomes. No one wins more than a pat on the back and 15 minutes of fame for calling the day the SHTF. After that it's just dealing with the consequences.

Thu, 03/14/2013 - 10:10 | Link to Comment Imminent Crucible
Imminent Crucible's picture

I think the astronomers decided that Uranus was not a planet after all, but just a huge swirling mass of hot gas. For that reason, it was renamed Ted Kennedy, who also turned out not to be a planet after all.

Spelling Edit: that should be "asstronomers".

Thu, 03/14/2013 - 05:14 | Link to Comment AGoldhamster
AGoldhamster's picture

Cycles have never ever in human history been something for the sheep.

Thu, 03/14/2013 - 06:06 | Link to Comment Orly
Orly's picture

I've looked into it a bit and there really is something to the Astrology thing and markets.

Problem is, the person doing the reading has to be an ace and since they all say this mysterious stuff, it's hard to know who knows what.

:D

P.S.  Awesome chart, by the way.  Very detailed.  Nice.  Thanks.

Thu, 03/14/2013 - 07:18 | Link to Comment Ratscam
Ratscam's picture

best astrology newsletter is www.amanita.at
stunningly accurate, definitely outperforming GS or Bernank

Thu, 03/14/2013 - 05:11 | Link to Comment orangegeek
orangegeek's picture

1929 was the first analogy.  Then 1937.   Even the 1960s.

 

The Dow Jones Daily is up 9 days in a row.  The overnight indicate 10 ups by the end of today (up another 40 points - yawn).  Volume is abysmal.  This is new territory unlike anything in the past.  Even the MSM is calling for a 5% correction.  MSM usually reports euphoria before a collapse (yes, much like the above).

 

http://bullandbearmash.com/chart/dow-jones-daily-time-high-9th-consecuti...

 

What's interesting is the US Dollar is rocketing and the markets/commodities have barely responded.  Let's see what Q1 reporting brings us.

Thu, 03/14/2013 - 05:56 | Link to Comment Orly
Orly's picture

Really, the dollar itself isn't doing much.  It's the Pound and the Euro that are falling through the floor.

 

Thu, 03/14/2013 - 06:23 | Link to Comment just a dude
just a dude's picture

Some twat said on Bloomberg about 30 minutes ago, "the US banks already did the heavy lifting" with regard to 2008 to present!  What a hoot!

Thu, 03/14/2013 - 06:57 | Link to Comment CDNX fan
CDNX fan's picture

Sell/Short cash - if you remember that initial set-up, everything else  comes easy. Sell cash and cash equivalents at every turn; the replacement is as follows: real estate, farmland, common stocks, commods, then a smattering of precious metals. The WORST trade is to short ANYTHING non-cash because cash (the currency of all G20 nations) is being purposely debased. You don't want to own something that is being LEGISLATED lower. The 1937-style crash will only occur if policy changes and the G20 Kollective decides upon tightening. As a cynic, I would say that occurs when the last Goldman/Morgan insider is flat/short some time this mid-late summer which will coincide with the money-flow reversal indicating that the public is now back "in". Then caveat friggin emptor.

Thu, 03/14/2013 - 07:19 | Link to Comment Don Diego
Don Diego's picture

1936...ah the good old times

Thu, 03/14/2013 - 08:30 | Link to Comment ekm
ekm's picture

LEHMAN TRIPPLE, That's all I have to say.

 

The event about to occur will be 3 x Lehman, which was baptised here on Zerohedge as: LEHMAN TRIPPLE

Thu, 03/14/2013 - 08:55 | Link to Comment herewego...
herewego...'s picture

just logged in to add the same as everyone else - amazing stuff.

Thu, 03/14/2013 - 09:00 | Link to Comment the not so migh...
the not so mighty maximiza's picture

great article!!!!

Thu, 03/14/2013 - 09:02 | Link to Comment Monedas
Monedas's picture

Redux .... theft, lies and force .... the constants .... in the socialist remix !

Thu, 03/14/2013 - 09:05 | Link to Comment SheepDog-One
SheepDog-One's picture

Been a clusterfuck ever since the FED act of 1913.

Thu, 03/14/2013 - 09:14 | Link to Comment spanish inquisition
spanish inquisition's picture

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...

And you still see people being taken by 3 card monte on New York streets... There is always a new batch of muppets to be taken, or educated.. I mean "helped"....with financial goals. I guess people really love magic. Oh wait, I think they prefer to be called Financial Illusionists.

Thu, 03/14/2013 - 09:17 | Link to Comment Monedas
Monedas's picture

1936 .... Kentucky repeals 3% sales tax .... 2013 .... Gov. Moonbeam repeals CA sales tax then retreats to his attic apartment to suck nubian dicks !

Thu, 03/14/2013 - 09:20 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

Did helicopters even exist back in the 30s, and if not, just what did the Bernank Of Olde fly?

Thu, 03/14/2013 - 09:20 | Link to Comment Dr. Engali
Dr. Engali's picture

Did you hear about the rioting in Brooklyn? It's all over the news....some place...

Thu, 03/14/2013 - 10:07 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

So I read this and think WTF is he talking about, I go to Drudge and there is a small link and it says that shit has be going on for 3 days and our lovely mainstream media has only seen fit to report it today, I guess.  Little kid gets shot, hell in the streets of Brooklyn but who the fuck cares because what's important is that Kim Kardassian's ass is a bit bigger, Dow's pumped up, and dingleBarry is being picked on by those evil white guys.  

Thu, 03/14/2013 - 09:33 | Link to Comment AnAnonymous
AnAnonymous's picture

This time, it is different.

In 1936, the world was not yet globalized. Some work and a lot of inputs toward the 'american' world were left.

Today, globalization is nearing its end and the boon 'americans' got from it as well.

Apart from expanding in space... Oh, wait, 'americans' tried this and failed.

Just meant we are trapped on Earth with an 'american' future to boot.

Welcome to an 'american' world. It is a cosy place to live, you'll see.

Thu, 03/14/2013 - 12:53 | Link to Comment monad
monad's picture

Without America you would be lost. If it weren't for America you would have to take responsibility for the series of failures that are your life, and your Dear Leader would have to find someone else to blame for his crimes and blunders. You should thank us for giving your life meaning.

Thu, 03/14/2013 - 09:34 | Link to Comment stiler
stiler's picture

that is some pig... that chart, that is. 

Isn'r Bernanke supposed to be a student od the Great Depression??

So he must see this... and so why is he..?

Oh wait. I get it.

 

Thu, 03/14/2013 - 09:53 | Link to Comment q99x2
q99x2's picture

We still have JPM. That's what the Morgue does.

Thu, 03/14/2013 - 09:55 | Link to Comment SillySalesmanQu...
SillySalesmanQuestion's picture

Great article Tyler, the similarities of then and now are striking and eerie.The pendulum has swung one way for far too long. The lessons of excess are there for all to see, but bankers, the rich and the politicians they own are like the proverbial "hog at the trough". Who, if enabled, will continue eating until a violent, grotesque and fatal explosion will occur.

Thu, 03/14/2013 - 10:16 | Link to Comment Hohum
Hohum's picture

Actually the article makes me think of 2000.  What exactly trigged the fall of the Nasdaq in March?  What was the oh, shit moment?

Thu, 03/14/2013 - 10:20 | Link to Comment moneybots
moneybots's picture

"Those who cannot remember the past are condemned to repeat it."

 

Those remembering the past are repeating it " as Kyle Bass so eloquently noted, the brevity of financial memory is about two years..."

 

Thu, 03/14/2013 - 10:55 | Link to Comment tictawk
tictawk's picture

Man learns from history that man never learns from history.

Thu, 03/14/2013 - 10:26 | Link to Comment Dr Paul Krugman
Dr Paul Krugman's picture

Thanks for the glimpse back Tyler. This is how we learned which monetary policy to use; and this is why we are fortunate to have Chairman Bernanke at the Fed - he is a historian of the Depression.

Thu, 03/14/2013 - 11:07 | Link to Comment monad
monad's picture

Yes, despite the innovation by those pesky kids WW3 is still on schedule. Forward soviet!

Thu, 03/14/2013 - 10:27 | Link to Comment H E D G E H O G
H E D G E H O G's picture

tylers, don't really know who you guys are, but i have come to the conclusion that i should donate to the cause for Zero Hedge. just too good to be true dudes. thanks for the hard work and primo content each and everyday.

Thu, 03/14/2013 - 10:29 | Link to Comment MFLTucson
MFLTucson's picture

Why are we allowing this?  When do "we the people" take this country back from the gangsters?

 

Thu, 03/14/2013 - 10:33 | Link to Comment ATG
ATG's picture

Bravo TD.

Congratulations on outstanding financial journalism...

Thu, 03/14/2013 - 10:40 | Link to Comment eclectic syncretist
eclectic syncretist's picture

Bernanke you stupid fucker, we got the latest position on yesterday and it's a non-accumulation day so you're supposed to let the PMs run you fucking dumbass.  Damn I realize we need an idiot who doesn't know what's really going on to run the counterfeiting operation, but you are about the stupidest motherfucker on the planet.  Get your sorry shit together, get it unfucked, get gold and silver up today, or I'll get Crimin and Blankheart to rescind your pivot man priviledges at their next Bankster circle jerk, you dickhead fuckwit asshole.

Thu, 03/14/2013 - 11:22 | Link to Comment balz
balz's picture

This post is exactly why I love ZeroHedge.

Do NOT follow this link or you will be banned from the site!