Rampant speculation. Record trading volumes. Assets bought not because of their value but because the buyer believes he can sell them for more in a day or two, or an hour or two. Welcome to the late 1920s in the US. There are obvious and absolute parallels to the great bull market of the late 1990s, writes Galbraith in a new introduction dated 1997. Of course, Galbraith notes, every financial bubble since 1929 has been compared to the Great Crash, which is why this book has never been out of print since it became a bestseller in 1955.
Galbraith writes with great wit and erudition about the perilous actions of investors and the curious inaction of the government. He notes that the problem wasn't a scarcity of securities to buy and sell: "The ingenuity and zeal with which companies were devised in which securities might be sold was as remarkable as anything." Those words become strikingly relevant in light of revenue-negative start-up companies coming into the market each week in the 1990s, along with fragmented pieces of established companies, like real estate and bottling plants. Of course, the 1920s were different from the 1990s. There was no safety net below citizens, no unemployment insurance or Social Security. And today we don't have the creepy investment trusts--in which shares of companies that held some stocks and bonds were sold for several times the assets' market value. But, boy, are the similarities spooky, particularly the prevailing trend at the time toward corporate mergers and industry consolidations--not to mention all the partially informed people who imagined themselves to be financial geniuses because the shares of stock they bought kept going up. --Lou Schuler, Amazon.com
Customer Reviews:
Avg. Customer Rating: 5.0 / 5.0
Entertaining, Solid write up of the 1929 crash This is a surprisingly good reference on the 1929 crash. The book is very readable considering the subject matter. For me the run up to the crash got a bit too much detail whereas the details of aftermath and solutions got less attention than I would have liked. He also focuses on trivia about suicide rates which is quite entertaining but doesn't seem to the point (which for me is to understand and avoid these kind of wild crashes). We seem to have duplicated the conditions of this crash almost exactly... more info
Have we come full circle? John Kenneth Galbraith's classic study of the 1929 Wall Street crash is an exhilarating read. Galbraith combines a fluent, witty style with a detailed breakdown of the build up to disaster, It is interesting to note how most of the experts - journalists, academics, businessmen, bankers and politicians didn't have a clue what was going to happen and thought that the good times would carry on rolling. Gordon Brown anyone?
Will they never learn? What strikes anyone who reads this after the events of the past three months is just how similar the events are which JKG chronicled and which we are seeing happen now. The creation of wealth with no basis in reality, the delusion of millions that somehow things could only go on getting better, even the reassurances of the pundits as things unravelled faster and faster (stocks were overvalued, a healthy shake out, imminent restoration of the situation, unlying stocks are sound, very soon the markets will... more info
Essential Reading I found this book captivating, in a "gallows humor" sort of way. Although written many years ago, and recounting events in the distant past, it should be required reading for anyone in the markets today. More specifically, it should have been required reading a year ago (mid 2007) for those invested in finance and property sectors. Whether the malaise in those sectors (some stocks down 90%) spreads eventually to the general indexes remains to be seen. Tony Loton, author --
DON'T LOSE... more info
