Topic: Ghost of 1929 crash reappears

[oldcoastie6468]

Ghost of 1929 crash reappears
Commentary: Pay attention to the signals

By Anthony Mirhaydari

They say those who forget the lessons of history are doomed to repeat them.

As a student of market history, I’ve seen that maxim made true time and again. The cycle swings fear back to greed. The overcautious become the overzealous. And at the top, the story is always the same: Too much credit, too much speculation, the suspension of disbelief, and the spread of the idea that this time is different.

It doesn’t matter whether it was the expansion of railroads heading into the crash of 1893 or the excitement over the consolidation of the steel industry in 1901 or the mixing of speculation and banking heading into 1907. Or whether it involves an epic expansion of mortgage credit, IPO activity, or central-bank stimulus. What can’t continue forever ultimately won’t.

The weaknesses of the human heart and mind means the swings will always exist. Our rudimentary understanding of the forces of economics, which in turn, reflect ultimately reflect the fallacies of people making investing, purchasing, and saving decisions, means policymakers will never defeat the vagaries of the business cycle.

So no, this time isn’t different. The specifics may have changed, but the themes remain the same.

In fact, the stock market is right now tracing out a pattern eerily similar to the lead up to the infamous 1929 market crash. The pattern, illustrated by Tom McClellan of the McClellan Market Report, and brought to his attention by well-known chart diviner Tom Demark, is shown below.

Excuse me for throwing some cold water on the fever dream Wall Street has descended into over the last few months, an apparent climax that has bullish sentiment at record highs, margin debt at record highs, bears capitulating left and right, and a market that is increasingly dependent on brokerage credit, Federal Reserve stimulus, and a fantasy that corporate profitability will never again come under pressure.

On a pure price-analogue basis, it’s time to start worrying.

http://www.marketwatch.com/story/e45a77c1-7d43-4014-9c75-4006c9f46c54/stitch?storyguid=d3dbbabc-5dd2-11e3-9c28-00212803fad6&siteid=nwhpf

[rustybayonet]

Good post CG

This quote from the 'Marketplace' post

They say those who forget the lessons of history are doomed to repeat them.

Unfortunately IMO they don't "forget the lessons of history".  Those lessons are ignored, because of individual inflated misguided egos, and self-centered ideas of grandeur.

[warpmine]

If you cannot comprehend history then you're condemned to repeat it.

I can only leave us with this, the people in the market are as Ann Barnhardt described, greedy ignorant bastards.

[oldcoastie6468]

Good post CG

This quote from the 'Marketplace' post

They say those who forget the lessons of history are doomed to repeat them.

Unfortunately IMO they don't "forget the lessons of history".  Those lessons are ignored, because of individual inflated misguided egos, and self-centered ideas of grandeur.

I also think that every newly elected politician never experienced those history lessons. New and young is not always better; sometimes the old things are needed. We need a president who has experienced hard times and wars, not like the one we have now who has experienced nothing.