Great Depression Headlines, as always, from the highly entertaining News from 1930 blog. And all, very appropriate for our blow by blow recreation of the G.D., courtesy of the historically predisposed Chairman.
A. Reynolds, Cont'l. Ill. Bank & Trust Chair., criticizes Fed. Reserve easy-money policy as ineffective in reviving business, says it may cause banks to buy bonds that have “not always turned out fortunately” in the past; “it is a serious question as to whether a commercial bank should be a large purchaser of such bonds.”
Thomas Edison visits Newark Airport, hints he is working on new approach to developing helicopter.
Great depression: check; Easy-Reserve Money policy: check; Helicopter: check.
Ben bernane all over it
Trusteed Share News reviews history of severe market reactions in past 30 years, including those in 1903, '07, '17, '21, and '29. Points out that every market low was higher than the previous one, and therefore that buying after the market reaction “would have rewarded the investor in the highest degree.”
Today's Trusted Share News aka CNBC: "Buy the lows"
Arthur Lehman of Lehman Brothers: “improvement in business is slow but is nevertheless gaining; recent trends indicate no lines of business are getting worse, while a few are getting better.”
TD: Arthur Lehman is spinning in his grave right now. Nuf said.
O. Caldwell, Electronics editor, says “vacuum or electron tube” will be third great electric revolution following Edison's incandescent lamp and Westinghouse's introduction of alternating current. Greatest benefit to utility industry will be transmission of direct current over existing high tension lines, allowing 3 - 6 times as much power. Use of tubes also greatly reduces size of equipment; “a vacuum tube switch the size of a gallon bottle” can replace a 2 - 3 ton oil switch the size of a room.
TD: little did Caldwell know that the greatest "electric" revolution would be automated robots providing liquidity by the bushell to bankrupt firms such as AIG, C and MPG, who, just like shares, are in desperate need to keep moving hundreds of millions of shares of stock, or they simply die.
Today is 10th anniversary of deadly bombing at Wall and Broad Streets; bomb exploded 12:01PM, closing Stock Exchange and almost all financial operations.
The great debate: Bears argue that past month's rally has already discounted the mild improvement in business, and that decline in steel production in past week indicates weakness. Bulls counter that steel decline was due to Labor Day, that August steel and car loading figures show more than seasonal improvement, and that recent retail figures and company outlooks have been improved. On the technical side, bulls believe the recent rally has “definitely broken” the downtrend since last Sept., indicating future support should come in well above the June bottom of 212.