4 ms·

That wasn't caused by trading or its regulation, it was caused by macroeconomic policy.

arcticbull 6y ago
It's fair to say there were a lot of causes of the Great Depression, to be sure. However. Much of the "Roaring 20s" that preceded the giant market crash happened because of zero oversight or regulation and saw tons of fraud, and, yep, tons of reckless margin trading. This created huge systemic risk that all came to bear on Black Tuesday, which led to unemployment, homelessness and bankruptcies. This led to the Securities Act of 1933 and 1934. Further, the Glass-Steagall act, also of 1933 separated investment banks and depository institutions. I'll let you take one guess why this was necessary. I'll also let you take one guess what happened after it was repealed (in 1999). Also kicked off in 1933 was the FDIC. All three of these are incredibly relevant to crypto and to this specific conversation. [1] https://www.history.com/topics/us-government/securities-and-exchange-commission https://www.history.com/topics/us-government/securities-and-...
- SamReidHughes 6y ago
  In the teens, there was World War I and a pandemic. There is no reason why people should be out of work in 1933, because of a stock market crash that happened 4 years prior. Once the crash happens, you can pick yourself up and get back to work. The slow recovery in 1929-1940 was because of the Hoover and Roosevelt administrations (and Congress).
  - arcticbull 6y ago
    The link I provided does disagree so I'd love to read any supporting evidence you have!
    - SamReidHughes 6y ago
      You can just google it yourself, I'm not interested in listing evidence, because the proper way of looking at questions like this requires operating with a model of reality, not just listing a bunch of facts.
      - deleted 6y ago
        [deleted]
atomi 6y ago
A big part of that was people using stocks as collateral to borrow money to buy more stocks. And here we are now, a plague and a massive stock rally. If I were to bet, I'd say people should prepare for history to rhyme.

It's fair to say there were a lot of causes of the Great Depression, to be sure. However. Much of the "Roaring 20s" that preceded the giant market crash happened because of zero oversight or regulation and saw tons of fraud, and, yep, tons of reckless margin trading. This created huge systemic risk that all came to bear on Black Tuesday, which led to unemployment, homelessness and bankruptcies. This led to the Securities Act of 1933 and 1934. Further, the Glass-Steagall act, also of 1933 separated investment banks and depository institutions. I'll let you take one guess why this was necessary. I'll also let you take one guess what happened after it was repealed (in 1999). Also kicked off in 1933 was the FDIC. All three of these are incredibly relevant to crypto and to this specific conversation. [1] https://www.history.com/topics/us-government/securities-and-exchange-commission https://www.history.com/topics/us-government/securities-and-...

SamReidHughes 6y ago
In the teens, there was World War I and a pandemic. There is no reason why people should be out of work in 1933, because of a stock market crash that happened 4 years prior. Once the crash happens, you can pick yourself up and get back to work. The slow recovery in 1929-1940 was because of the Hoover and Roosevelt administrations (and Congress).
- arcticbull 6y ago
  The link I provided does disagree so I'd love to read any supporting evidence you have!
  - SamReidHughes 6y ago
    You can just google it yourself, I'm not interested in listing evidence, because the proper way of looking at questions like this requires operating with a model of reality, not just listing a bunch of facts.
    - deleted 6y ago
      [deleted]

atomi 6y ago

A big part of that was people using stocks as collateral to borrow money to buy more stocks. And here we are now, a plague and a massive stock rally. If I were to bet, I'd say people should prepare for history to rhyme.