6 ms·

The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money

The crash didn't happen because of 1 banker, but it did happen because of things he, and his contemporaries dreamed up. Basically bankers make money when money flows. It flows only when "there is something better". So to keep making money there always has to be "something better" and ultimately that becomes unsustainable. 1929 was a re-adjustment, where all the bullshit is cleaned away. It was perhaps the first time it impacted such a large portion of society. An education of the masses if you will. Crashes did, and will, keep happening again - as long as the myth of "forever going up" persists. In the early 2000s it was property. Today its (maybe /likely /probably) crypto. At least today society is notably, collectively, smarter. There are a lot more naysayers in general, and whole there will be crashes, they tend to be more limited in scope and reach. But greed, the root of all of this, will always be with us. Greed offers some to be winners, but most to be losers.

bogota 4y ago
Really today its crypto? The tiny market and not the massively overpriced tech stocks trading way way above earnings. They have just slightly corrected from the covid mania but many are still trading at ridiculous multiples that everyone justifies with “they will keep growing”
- bruce511 4y ago
  Not exclusively crypto, but when I see adverts for crypto on TV, and hear it pitched over radio, then I wonder. At that point it's appealing to the least sophisticated investors, which to me is the first signal of a bubble. The nature of a ponzi scheme is that it starts small, but then has to appeal to an ever larger group. This ends with mass advertising to reach the biggest group of all. Then what? Couple this with the tone. Crypto is being marketed as an investment, not as a utility, not as a currency. Its sole appeal is "it will go up". Crypto itself is mostly a solution looking for a (legal) problem. While the killer app is facilitating illegal activity (which has some value for moral, but illegal activity - alas a minority of the actual use case) that's a hard sell. Finding a legal killer app though is proving elusive. Most things it _can_ do are already done better/faster/cheaper/simpler another way. Of course it has some utility, but nowhere near the hype levels. Tech stocks - yes, they are high, and will likely correct some. But apple, Google, Microsoft, amazon, Facebook and friends are all generating huge amounts of revenue and profit. Their stock values are massive, but their profit levels are unprecedented. Startups get a lot if attention, but from VCs which is not public money, and not traded to the public, so is a different kind of bubble, unrelated to the 1929 depression etc.
  - actually_a_dog 4y ago
    You may be on to something here. JFK's father, Joe Kennedy, famously got out of the stock market before the 1929 crash after the kid shining his shoes gave him stock market tips. That's pretty much the equivalent of TV and radio ads for crypto.
  - Shorel 4y ago
    Every time someone says cryptocurrencies are 'a bubble' I know they are not paying attention. Or for some reason think there is going to be a single event that will finally end cryptocurrencies. Or they have an agenda and want them to end. It's not a single bubble, that stuff happened several times already. They lost more than 50% of their value in a short amount of time, several times already. It's a boiler. Its periodic bubbles, over and over again. Price fluctuations, slow climbing, then fast climbing, then it goes down, repeats. It has happened already, and it will be happening again and again. Every time you will be watching, thinking: this time, this is 'the big bubble' and it will burst and cryptocurrencies will be no more. Except they will continue boiling, prices will go up and down, and you will have to wait for the next time.
    - rippercushions 4y ago
      I don't think anybody is expecting cryptocurrencies as a whole to cease to exist. I do think a lot of people, including myself, see the current turmoil in the market as only a precursor to what will happen if/when Tether implodes and a whole lot of funny money is suddenly sucked out of the system. In crypto history terms, this would be a Mt Gox level event, which crashed prices by over 80%: https://en.wikipedia.org/wiki/Mt._Gox#/media/File:Bitcoin_exchange_mtgox_-_Feb2012-Feb2014_-_log_scale.png https://en.wikipedia.org/wiki/Mt._Gox#/media/File:Bitcoin_ex... (log scaled)
      - Shorel 4y ago
        Exactly. I expect that to happen to tether eventually, just because of inflation. There's also the probability of a 'flippening' event in the future, because ETH is no longer PoW. So ETH would switch to be the #1 currency. Or maybe not. But the cat is out of the bag, and cryptocurrencies are here to stay, and I would even say in any four year period they will still gain more than any other kind of asset for the foreseeable future.
- Phurist 4y ago
  That's what they keep saying throughout history, yet it seems that tech industry as a whole just wants to reach these highs over and over again. I wonder why ? Could it be because it's the superior business case, which can reach global markets at ease ? Oh noo... noo how can that be... my wood workshop in Agbogbloshie Dumpsite, Ghana has the best business model known to mankind, how can it be that it can not compete with BigTechCorpo123 ? Oh.. I don't know... maybe because BigTechCorpo123 can sell their product to the whole world at ease while your wood toys have to be shipped by vans ?
wsc981 4y ago
- bruce511 4y ago
  What we are experiencing now is inflation, not hyper inflation. Inflation is currently around 10% per year. Hyperinflation is where prices are changing during the day - effectively 10% or more in a day. Normal inflation is not new, and nothing to panic about - its how the world currently works, and how it has for at least 50 years. I get that if you are in a country which has had low inflation for a long time, then this time can be scary. But actually this is pretty normal for most of us.
  - lettergram 4y ago
    Hyperinflation does appear to have a loose definition of >=50% inflation by month. https://en.m.wikipedia.org/wiki/Hyperinflation https://en.m.wikipedia.org/wiki/Hyperinflation > Normal inflation is not new, and nothing to panic about - its how the world currently works, and how it has for at least 50 years. Even Rome had inflation, they’d dilute the amount of silver and gold in their coins. The challenge at the moment is an asset deflation with a consumable inflation; with an economy which is shrinking. This is called stagflation and is different and has its own challenges. https://en.m.wikipedia.org/wiki/Stagflation https://en.m.wikipedia.org/wiki/Stagflation
Shorel 4y ago
I think it is properties again. And harder this time. Except this time it is worse. It's not about the rising prices of properties, but the idea that there isn't something else more profitable than real state long term that makes me feel the economy is stuck in a bad place. Cryptocurrencies are noisy news-makers, but their total value is still very small compared to basically anything else.
- tjr225 4y ago
  Property is intrinsically limited. Property in desirably places is especially intrinsically limited. You’re basically lucky if you own any property at all at this point. Just take a gander and how much property in Hong Kong or Amsterdam costs and you’ll start to think it is cheap in the US. It’s only going to get worse. Do you think that people are going to desire living in Santa Monica or Queen Anne less over the next few hundred years? Our planet is getting smaller relative to the amount of people that live on it and relative to the habitable places that exist.
  - ReptileMan 4y ago
    Except why is no one asking the question why so few places are desirable and doing something to alleviate it.
    - tjr225 4y ago
      Most of the time it’s because you get to live in a city and then also get to drive an hour and go hiking/skiing in the mountains or go to the beach. It isn’t very complicated.
    - socialismisok 4y ago
      Plenty of folks are, but if the thing you want to do about it is decommidify housing you get a whole lot of people saying, "that'll never work!" Without actually engaging with the ideas. Plenty of ideas and people trying out there, just not much interest from the every day person.
    - lmm 4y ago
bmitc 4y ago
> At least today society is notably, collectively, smarter. There are a lot more naysayers in general, and whole there will be crashes, they tend to be more limited in scope and reach. Is that really true?
- rufus_foreman 4y ago
  No, society is getting less smart. Average IQ is falling and has been for almost half a century, which has been obvious to anyone who has lived through it.
  - circlefavshape 4y ago
    AFAIK you have this exactly backwards https://en.wikipedia.org/wiki/Flynn_effect https://en.wikipedia.org/wiki/Flynn_effect
    - rufus_foreman 4y ago
      The Flynn effect ended and reversed decades ago. In developed countries at least. It would be pretty sad if it has reversed in developing countries.
irjustin 4y ago
> At least today society is notably, collectively, smarter. My pessimistic view will say greed will wipe out any "collective" smartness and the cycle repeats.
G3rn0ti 4y ago
> it did happen because of things he, and his contemporaries dreamed up Well yes and no. The common root of all evil behind all the bank runs and market crashes throughout the last 100 years is monetary inflation. It is not a coincidence that the worst economic crises happened after the installation of the Federal Reserve. For a good general overview on this topic I recommend reading „The Ethics of Money Production“.
roenxi 4y ago
> But greed, the root of all of this, will always be with us. Greed isn't the root of all this, because greed was present at times when the market did crash, didn't crash, generated enormous real value and at all other times. Greed is just a mindset that makes people act, a bit like a fuel for activity. Fuel is associated with forest fires, but fuel isn't really a root cause. 5 years of confusion in the stock market isn't even that interesting. We shouldn't be talking about it almost a century later. Our stock market isn't even connected to the performance of the real economy like it was back then, modern markers went up during COVID and down with the recovery, because central bank policy has successfully dissociated reality from returns.
ianai 4y ago
1929 refuted the notion that “what goes down will come back up.” Society in the US pushed hard for decades to investigate and protect against similar market conditions through banking regulations and oversight. Galbraiths work is worth reviewing on this. (The sad truth is much of those safeguards were dismantled by the 50s.) Definitely history worth studying.
vsareto 4y ago
>At least today society is notably, collectively, smarter. Intelligence has gone up, Wisdom has declined
chatterhead 4y ago
1929 wasn't a readjustment and the early 2000s weren't about property and no we are not "...notably, collectively, smarter." Stay in school.

bogota 4y ago

Really today its crypto? The tiny market and not the massively overpriced tech stocks trading way way above earnings. They have just slightly corrected from the covid mania but many are still trading at ridiculous multiples that everyone justifies with “they will keep growing”

bruce511 4y ago
Not exclusively crypto, but when I see adverts for crypto on TV, and hear it pitched over radio, then I wonder. At that point it's appealing to the least sophisticated investors, which to me is the first signal of a bubble. The nature of a ponzi scheme is that it starts small, but then has to appeal to an ever larger group. This ends with mass advertising to reach the biggest group of all. Then what? Couple this with the tone. Crypto is being marketed as an investment, not as a utility, not as a currency. Its sole appeal is "it will go up". Crypto itself is mostly a solution looking for a (legal) problem. While the killer app is facilitating illegal activity (which has some value for moral, but illegal activity - alas a minority of the actual use case) that's a hard sell. Finding a legal killer app though is proving elusive. Most things it _can_ do are already done better/faster/cheaper/simpler another way. Of course it has some utility, but nowhere near the hype levels. Tech stocks - yes, they are high, and will likely correct some. But apple, Google, Microsoft, amazon, Facebook and friends are all generating huge amounts of revenue and profit. Their stock values are massive, but their profit levels are unprecedented. Startups get a lot if attention, but from VCs which is not public money, and not traded to the public, so is a different kind of bubble, unrelated to the 1929 depression etc.
- actually_a_dog 4y ago
  You may be on to something here. JFK's father, Joe Kennedy, famously got out of the stock market before the 1929 crash after the kid shining his shoes gave him stock market tips. That's pretty much the equivalent of TV and radio ads for crypto.
- Shorel 4y ago
  Every time someone says cryptocurrencies are 'a bubble' I know they are not paying attention. Or for some reason think there is going to be a single event that will finally end cryptocurrencies. Or they have an agenda and want them to end. It's not a single bubble, that stuff happened several times already. They lost more than 50% of their value in a short amount of time, several times already. It's a boiler. Its periodic bubbles, over and over again. Price fluctuations, slow climbing, then fast climbing, then it goes down, repeats. It has happened already, and it will be happening again and again. Every time you will be watching, thinking: this time, this is 'the big bubble' and it will burst and cryptocurrencies will be no more. Except they will continue boiling, prices will go up and down, and you will have to wait for the next time.
  - rippercushions 4y ago
    I don't think anybody is expecting cryptocurrencies as a whole to cease to exist. I do think a lot of people, including myself, see the current turmoil in the market as only a precursor to what will happen if/when Tether implodes and a whole lot of funny money is suddenly sucked out of the system. In crypto history terms, this would be a Mt Gox level event, which crashed prices by over 80%: https://en.wikipedia.org/wiki/Mt._Gox#/media/File:Bitcoin_exchange_mtgox_-_Feb2012-Feb2014_-_log_scale.png https://en.wikipedia.org/wiki/Mt._Gox#/media/File:Bitcoin_ex... (log scaled)
    - Shorel 4y ago
      Exactly. I expect that to happen to tether eventually, just because of inflation. There's also the probability of a 'flippening' event in the future, because ETH is no longer PoW. So ETH would switch to be the #1 currency. Or maybe not. But the cat is out of the bag, and cryptocurrencies are here to stay, and I would even say in any four year period they will still gain more than any other kind of asset for the foreseeable future.
Phurist 4y ago
That's what they keep saying throughout history, yet it seems that tech industry as a whole just wants to reach these highs over and over again. I wonder why ? Could it be because it's the superior business case, which can reach global markets at ease ? Oh noo... noo how can that be... my wood workshop in Agbogbloshie Dumpsite, Ghana has the best business model known to mankind, how can it be that it can not compete with BigTechCorpo123 ? Oh.. I don't know... maybe because BigTechCorpo123 can sell their product to the whole world at ease while your wood toys have to be shipped by vans ?

wsc981 4y ago

bruce511 4y ago
What we are experiencing now is inflation, not hyper inflation. Inflation is currently around 10% per year. Hyperinflation is where prices are changing during the day - effectively 10% or more in a day. Normal inflation is not new, and nothing to panic about - its how the world currently works, and how it has for at least 50 years. I get that if you are in a country which has had low inflation for a long time, then this time can be scary. But actually this is pretty normal for most of us.
- lettergram 4y ago
  Hyperinflation does appear to have a loose definition of >=50% inflation by month. https://en.m.wikipedia.org/wiki/Hyperinflation https://en.m.wikipedia.org/wiki/Hyperinflation > Normal inflation is not new, and nothing to panic about - its how the world currently works, and how it has for at least 50 years. Even Rome had inflation, they’d dilute the amount of silver and gold in their coins. The challenge at the moment is an asset deflation with a consumable inflation; with an economy which is shrinking. This is called stagflation and is different and has its own challenges. https://en.m.wikipedia.org/wiki/Stagflation https://en.m.wikipedia.org/wiki/Stagflation

Shorel 4y ago

I think it is properties again. And harder this time. Except this time it is worse. It's not about the rising prices of properties, but the idea that there isn't something else more profitable than real state long term that makes me feel the economy is stuck in a bad place. Cryptocurrencies are noisy news-makers, but their total value is still very small compared to basically anything else.

tjr225 4y ago
Property is intrinsically limited. Property in desirably places is especially intrinsically limited. You’re basically lucky if you own any property at all at this point. Just take a gander and how much property in Hong Kong or Amsterdam costs and you’ll start to think it is cheap in the US. It’s only going to get worse. Do you think that people are going to desire living in Santa Monica or Queen Anne less over the next few hundred years? Our planet is getting smaller relative to the amount of people that live on it and relative to the habitable places that exist.
- ReptileMan 4y ago
  Except why is no one asking the question why so few places are desirable and doing something to alleviate it.
  - tjr225 4y ago
    Most of the time it’s because you get to live in a city and then also get to drive an hour and go hiking/skiing in the mountains or go to the beach. It isn’t very complicated.
  - socialismisok 4y ago
    Plenty of folks are, but if the thing you want to do about it is decommidify housing you get a whole lot of people saying, "that'll never work!" Without actually engaging with the ideas. Plenty of ideas and people trying out there, just not much interest from the every day person.
  - lmm 4y ago

bmitc 4y ago

> At least today society is notably, collectively, smarter. There are a lot more naysayers in general, and whole there will be crashes, they tend to be more limited in scope and reach. Is that really true?

rufus_foreman 4y ago
No, society is getting less smart. Average IQ is falling and has been for almost half a century, which has been obvious to anyone who has lived through it.
- circlefavshape 4y ago
  AFAIK you have this exactly backwards https://en.wikipedia.org/wiki/Flynn_effect https://en.wikipedia.org/wiki/Flynn_effect
  - rufus_foreman 4y ago
    The Flynn effect ended and reversed decades ago. In developed countries at least. It would be pretty sad if it has reversed in developing countries.

irjustin 4y ago

> At least today society is notably, collectively, smarter. My pessimistic view will say greed will wipe out any "collective" smartness and the cycle repeats.

G3rn0ti 4y ago

> it did happen because of things he, and his contemporaries dreamed up Well yes and no. The common root of all evil behind all the bank runs and market crashes throughout the last 100 years is monetary inflation. It is not a coincidence that the worst economic crises happened after the installation of the Federal Reserve. For a good general overview on this topic I recommend reading „The Ethics of Money Production“.

roenxi 4y ago

> But greed, the root of all of this, will always be with us. Greed isn't the root of all this, because greed was present at times when the market did crash, didn't crash, generated enormous real value and at all other times. Greed is just a mindset that makes people act, a bit like a fuel for activity. Fuel is associated with forest fires, but fuel isn't really a root cause. 5 years of confusion in the stock market isn't even that interesting. We shouldn't be talking about it almost a century later. Our stock market isn't even connected to the performance of the real economy like it was back then, modern markers went up during COVID and down with the recovery, because central bank policy has successfully dissociated reality from returns.

ianai 4y ago

1929 refuted the notion that “what goes down will come back up.” Society in the US pushed hard for decades to investigate and protect against similar market conditions through banking regulations and oversight. Galbraiths work is worth reviewing on this. (The sad truth is much of those safeguards were dismantled by the 50s.) Definitely history worth studying.

vsareto 4y ago

>At least today society is notably, collectively, smarter. Intelligence has gone up, Wisdom has declined

chatterhead 4y ago

1929 wasn't a readjustment and the early 2000s weren't about property and no we are not "...notably, collectively, smarter." Stay in school.