Good Sirs —
I’d like t skip today’s market discussion in favor for something that has been vexing me for some time now: The Great Lie of the 1929 stock market crash and subsequent “Great Depression.”
Horrible Trader, 1929
A great man once said “History is written by the zebra for the zebra” and this wisdom places itself in the center of the propaganda that encapsulates the market crash of 1929 and the economic depression thereafter. Before I delve into the details, I’d first like to illuminate the fact that wealthy people did quite well during the 1930s and it was the poors, aka the zebra, and bad traders who got fleeced in 1929.
Let’s examine the details.
S&P 500 returns from 1928-1938
So let me get this straight. The market ROSE 43% in 1928 and fell 8% in 1929 and I am supposed to feel sorry for some losers who zeroed the fuck out and tossed themselves out from windows? An 8% decline isn’t worthy of a footnote, let alone the endless books and movies decrying it to be such a horrible crash and the beginning of the end for America.
It was so bad, in 1930 the market fell a harrowing 25%. Can you believe it? To be fair, the -43% COLLAPSE in 1931 is certain cause for alarm, especially after the 1930 drubbing. But as you can see in 1932 markets consolidated and TOOK THE FUCK OFF in 1933, achieving a 50% return, pausing again in 1934, and then set on fire again in 1935 and 1936, returning +46% and +32%, respectively.
The stories we had been told were lies. In fact, dare I say, we’ve been through worse markets. Did oil ever trade NEGATIVE $37bbl in 1929? I think not.
Check out what we went through from 2000-2002:
2000: -37%
2001: -33%
2002: -37%
In 2008, we lost 42%.
My point is — the very worst stock markets in history were temporary declines and if you were trading back then — they’d be easy to navigate. Granted, I got caught flat in 2000 and wiped myself out clean — wrote two books about the ordeal. I was sad when it happened and I cried like a bitch when I lost it all. But I was very young then and inexperienced. I deserved to lose it all because I was a moron. Morons deserve to lose until they become smart.
Nothing that occurred from 1928-1938 is remotely interesting, or noteworthy. It looked like a normal tape, ups and downs — fortunes made and dashed. Easy stuff.
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Retaliatory worldwide tariffs and protection type policies was a much larger cause of the Great Depression than the market crash (as you inferred). That helped to increase unemployment as consumer demand collapsed. WW2 saved the world economies.
You forgot to mention the 10/19/87 Black Monday crash of -28% of the DIA. That was a beaut. The PPT (Plunge Protection Team) was born and reversed another downfall about 10:30 the next Tuesday Morning.