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Stocks Plunge Amid Recession Fears

By Jeralyn, Section Off Topic
Posted on Fri Oct 24, 2008 at 10:36:08 AM EST
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Wall Street took a steep fall this morning.

For the superstitious among you, October 24, 1929 was the day the Great Depression started.

The crash of 1929, like the current global economic crisis, came after a prolonged period of economic growth.

October 24, 1929, known as Black Thursday, marked the first day of the crash with panic selling ensuing on the Dow Jones. This was triggered by predictions of an impending market crash, leading to a record 13m shares being traded.

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    Stocks Plunge Amid Recession Fears | 12 comments (12 topical)

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    To be fair. . . (5.00 / 1) (#1)
    by LarryInNYC on Fri Oct 24, 2008 at 10:42:14 AM EST
    at the time of writing, the market has made back more than half of this morning's fall.

    On the bright side, the (5.00 / 1) (#2)
    by mg7505 on Fri Oct 24, 2008 at 10:45:43 AM EST
    Depression brought us our greatest Progressive President.

    Someone give Mortimer his dollar (5.00 / 0) (#3)
    by addy on Fri Oct 24, 2008 at 11:16:56 AM EST
    and lets end this thing.
    /not so obscure

    It's not necessarily superstition (none / 0) (#4)
    by scribe on Fri Oct 24, 2008 at 11:39:24 AM EST
    I explained a couple weeks ago in another comment, during an earlier rollercoaster ride, that there is a whole sub-school of market analysis within the school that is technical analysis which revolves around the anniversaries of big and small moves in the market.

    Today's a big anniversary, so expect a lot of volatility.

    The Dow is still above the long-term trendline, so despite all the bearish feel, we have not yet crossed into bear-market territory.

    Cold comfort, I know.  But it is what it is.

    Lost half its value in a year. (5.00 / 2) (#5)
    by jerry on Fri Oct 24, 2008 at 12:21:51 PM EST
    I don't pay much attention to stocks, especially to technical analysis, but I find it hard to believe the market is not in bearish territory.

    Can you point to the chart you're using to see its long term trendline?

    Thanks.

    Parent

    If you extend the timeline back far enough ... (5.00 / 2) (#6)
    by Robot Porter on Fri Oct 24, 2008 at 12:37:23 PM EST
    the market will look as if it's growing.

    Of course, that's not much different than saying if the stock market came into existence yesterday it would represent enormous growth.

    ;)

    Parent

    Much of the market volatility is caused by (none / 0) (#7)
    by imhotep on Fri Oct 24, 2008 at 01:00:55 PM EST
    hedge fund and mutual fund redemptions by fearful
    investors.  Confidence in the economy and banking system is at an almost all-time low.  
    Not an original explanation, but I don't think superstition about the anniversary of the '29 crash is much of a factor.

    But then you read about the guy (none / 0) (#9)
    by oculus on Fri Oct 24, 2008 at 01:43:16 PM EST
    who kept a large amount of cash on top of his dresser and it was mutilated by mice.  

    Parent
    Unaware of 10/24 (none / 0) (#8)
    by Frank Burns on Fri Oct 24, 2008 at 01:22:14 PM EST
    October 29, Black Tuesday is the more memorable date, but from googling I see that Oct 24 was also fateful. Learn something every day from TL. Sorry I din't trust ya.

    I've settled on the Dow hitting 6500 (none / 0) (#10)
    by Militarytracy on Fri Oct 24, 2008 at 06:00:13 PM EST
    before we have officially hit the bottom.  Between the dismal Christmas retail sales wedded to the upcoming unemployment, I'm thinking that'll do it along with the credit default swap reality.

    bear in mind, (none / 0) (#11)
    by cpinva on Fri Oct 24, 2008 at 06:33:38 PM EST
    back in 1929, you could buy stock on a 10% margin, the assumption being that (like today's housing situation), the rise in share value would cover the 90% loan, and make you a tidy profit on top of it. this kind of leverage is great, if you have the cash assets to pay it, should the market go south. unfortunately, most people didn't.

    when the panic selling ensued, and those margins were called, brokers and buyers quickly found themselves bankrupt. hence, the stories of them jumping out of windows, as they watched their vast paper fortunes become fodder for ticker-tape parades.

    one of the results of that thin margin buying was a huge increase in the amount of cash buyers were required to pay up front, more stringent rules as to who qualified for margin buying, the establishment of the SEC, and mandatory audits of all publicly held companies.

    of course, it does help if the SEC actually enforces its own regulations.

    What is it about October (none / 0) (#12)
    by coigue on Fri Oct 24, 2008 at 07:27:32 PM EST
    there is also October of 1987...

    Stocks Plunge Amid Recession Fears | 12 comments (12 topical)

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