Recently, the US stock market has crashed one after another, and people have speculated whether the big bull market that has lasted for 13 years in the United States has really ushered in an inflection point. In fact, the rise and fall of the US stock market is not our business, but the bad is bad in the Chinese stock market, it is always with the fall and not with the rise, and always fall more than others. This is the pain point that makes investors feel sad.
It is said that there is no stock market that only rises and does not fall, but the US stock market has created a miracle: in 13 years, the Dow Jones index has risen from 6,000 points to a high of 36,000 points, attracting the envy of global investors. Today, the United States is facing severe inflation, and if the Fed cannot find an effective solution, I am afraid that the longest bull in history will really end here. It is difficult to predict what impact it will have on the global economy.
Historically, the first bull in the U.S. stock market appeared in the 1920s, and the booming economy led the stock market to soar for 8 years. The bubble finally burst in 1929, and a super-stock market crash that had never been experienced in human history broke out from the United States and eventually swept the world, causing the people of the world to lie innocently. More than 90 years later, will we witness history again?
So, how crazy was the U.S. stock market in 1929? How could a shoe shine boy save U.S. President John F. Kennedy's dad? How could Churchill almost lose his old money?
For Americans, the 20s were a golden age for the U.S. stock market. At that time, American stockbrokers were like insurance salesmen, door-to-door, warm and thoughtful, gushing to every stranger to draw a big pie: no effort, lie flat can make a lot of money, come to speculate.
This kind of pie in the sky is a good thing that few people can refuse. Citizens who know nothing about stocks, after going through the process of doubting, understanding, and accepting, rush to invest their savings, pension money, and even borrow money into the stock market. Just like when the stock market is hot today, people talk about the streets and talk about stocks after dinner. Even factory workers, taxi drivers, and road sweepers can tell you a few insider tips and recommend a few "god stocks."
In the book Inside the Great Depression of 1929, it is described as follows: "In a factory in Boston, all workshops have large blackboards on which people write down the latest quotes from the exchange every hour; in a texas ranch, cowboys install a loudspeaker in a cowshed to keep abreast of the market through the radio; and in order to attract women into the market, many brokers have set up special rooms for women." ”
The bullish stock market drives everyone crazy, and people use the stock market as a cash machine, dreaming of making a fortune and changing their destiny there.
As more and more investors entered the market, the New York stock index flipped upside down. From 1922 to 1929, the stock market rose 20 percent a year, and the craziest of all, March 1928 to September 1929, NYSE stock prices were rocket-pumping every day, often rising 10 to 15 points a day, making it easier to make money than to pick it up. This has further stimulated crazy investors, who have money in their hands to continue to invest, and those who have no money in their hands will increase leverage and raise funds to buy stocks. Everyone is buying, buying, buying, buy At the time, The New York Times believed that 1929 would be the most glorious year for the U.S. stock market.
In fact, some sane people know that the stock market is about to peak, but no one knows where that highest point is and when it will come.
Although I don't know where the top of the stock market is, there is a person who is drunk and awake, and escaped the disaster of the stock market in time. This man was Joseph Kennedy Sr. the father of later U.S. President John F. Kennedy.
At the time, Joseph Sr. was in charge of a Boston bank, claiming to be the youngest banker in the United States, accumulating enormous wealth by investing in industry and the stock market. Just before the stock market crash of 1929, Joseph Sr. announced his exit from the stock market. The reason why he was able to take profits in time and retire from the whole body was thanks to a child who shined shoes.
One day, when old Joseph was sitting on the side of the street reading a newspaper, a shoe shine boy came up and asked, "Sir, do you want to shine your shoes?" ”。 Old Joseph agreed. While rubbing hard, the shoe shine boy said to him enthusiastically: "Sir, do you speculate in stocks?" Let me recommend a few popular stocks to you to make sure you make a lot of money. Old Joseph was stunned, and then put down the newspaper, took out a dollar and threw it to the child, and turned away before the shoes were finished.
Joseph Sr. hurried back to the company and immediately had people throw away all the shares held by the company. The subordinates did not know, so they asked him: "Now that the stock market is so good, why should it be sold?" Joseph Sr. replied: "Now even the shoe shine boy thinks he is a stock expert, I think, it is time to quit." ”
The elder Joseph's investment vision and analytical skills proved to be extremely old, and this wise choice laid the foundation for the future of the Kennedy family. If they don't get out in time, it's hard to predict whether the Kennedy family will become the first family in American politics in the future.
To this day, some stock market investors still use this method when judging whether the market has peaked: if everyone around you is recommending stocks to you, it means that the stock market has fallen into the final madness.
Joseph Jr. Kennedy (left), Joseph Sr. Kennedy (center), John. Kennedy (right)
On September 3, 1929, the U.S. stock market climbed to an all-time high, with the Dow reaching a record 386. This point seems to be pediatric today, but you know, in the more than 40 years since its inception in 1884, the Dow Jones index has only reached a maximum of 110 points.
So, like a man who had been partying for three days and three nights, he was injected with a stimulant, and the whole of America fell into a morbid madness and enjoyed the final revelry!
However, the bubble will burst one day.
On October 19, 1929, there was a wave of sell-off in the New York stock market, and the stock price fell sharply, but it did not attract enough attention. Because there have been many declines before, but they will eventually regain the lost ground. The biggest bull market in history has paralyzed people's nerves, and investors who have lost their minds believe that this decline will come back in a few days.
Thursday, October 24, 1929. Wall Street celebrated one of the most memorable and darkest days in history.
After the opening of the New York Stock Exchange in the morning, the stock index was very strong and there was no abnormality, but the trading volume was very large. At 11:00 a.m., the market suddenly appeared "avalanche", the stock price fell off a cliff, and people competed to sell. At 11:30, the stock market collapsed completely, and the diarrhea continued.
Everyone is frantically throwing out their stocks, but they find out bitterly: no one wants to take the order!
At this time, the inside and outside of the exchange were crowded with people, and the hall was chaotic, full of crying and screaming people. The whole of America is in despair.
On the same day, a shocking photo appeared on the pages of major Newspapers in the United States: a gentleman stood next to a car worth tens of thousands of dollars, and a sign hung on the car that read: "$100 can buy this car, the stock market has swallowed everything, and cash is urgently needed." ”
Wall Street bankers can't sit still, and if the stock market crashes, the U.S. financial industry will collapse completely. That afternoon, at the suggestion of Charles Michel, the president of the world's largest bank at the time, National City Bank, a bailout coalition was organized to buy a large number of stocks to stop the stock market from falling.
This is not the first time bankers have bailed out. Since entering October, the stock market has fallen several times, but they have turned the tide and invested a little money to stabilize the market. This time, however, it failed. That afternoon, they spent millions of dollars on stocks, only to slow down the plunge slightly. You know, millions of dollars were huge in 1929, but at this time they were like mud cows in the sea, and even decent waves did not turn over.
The 31st President of the United States, Hoover
Politicians can't sit still. On October 25, U.S. President Hoover delivered a speech in support of the stock market: "The U.S. business base is good, and production and distribution have not lost their previous equilibrium." ”。
The president has come out to express his position, and it is reasonable to say that the stock market should be more stable. But by this time, the nerves of investors were already extremely fragile, and the stock market continued to fall nightmarishly after a short-lived upswing. On October 28, the Dow Jones index closed at 260 points, and the stock market lost nearly $10 billion in just one day.
Countless former "millionaires" woke up destitute; some of the rich people who sailed their yachts to the sea returned to find that they had become penniless civilians.
Tuesday, October 29, 1929. The New York stock market is still raging, with sell orders flying like snowflakes, and some people describe it as putting these sell orders on the ground, which can raise the entire Wall Street by 10 centimeters. There was only one voice in the trader's ear: "Sell, sell, sell..." The whole exchange was still a mess. On the same day, the Dow Jones index closed down another 11.73%. For most shareholders, less than a tenth of their assets at this time are less than a decade at the beginning of the year.
It is not only the stock price that jumps off the building on this day, but also the shareholders. The suicide epidemic began to spread, and within an hour, 11 well-known stock speculators committed suicide.
Examples of the stock market turning people crazy abound. An investor initially made a fortune in the stock market, with a maximum book wealth of $7.5 million. He used 1.5 million of them to buy treasury bonds, telling his wife that it was the last guarantee of the family's future life. If one day he asked his wife for these bonds, he must not give them to him, because by then he had lost his mind.
At the end of 1929, after several slumps, he asked his wife for the bonds, intending to cash them out and put them into the stock market to bottom out and earn back the $6 million he lost. The wife initially refused, but could not resist the husband's soft and hard bubbles, but still agreed. The end of the story can be imagined, and they ended up ruining their family.
From 1925 to 1955, the U.S. Dow Jones Index moved
In fact, not only are ordinary shareholders mired in stock market crashes, but even economists are having a hard time escaping bad luck. Keynes, a famous American economist in the 20th century, almost went bankrupt in this crisis. Until his death, the stock market crash of 1929 was still an indelible shadow in his heart.
Keynes
Economists are still like this, and politicians who invest in the stock market are even more difficult to avoid. In 1929, Churchill, who had just stepped down as British chancellor of the exchequer and fell into a political trough, came to the United States and was warmly received by both the political and economic circles of the United States. The frenzy of the US stock market infected him, although he knew nothing about financial investment, but his natural competitive spirit made him decide to try the thrill of stock trading as well.
Unexpectedly, just after entering the stock market, the unlucky Churchill encountered a stock market crash that shocked the world, and on October 24, he almost lost $100,000 invested in the stock market.
Churchill later recalled the stock crash he witnessed: "Right under the window of my room, someone jumped from the 15th floor and fell to pieces, causing a serious mess. ”
From early September to mid-November 1929, the new York Stock Exchange lost about $30 billion in market capitalization, while the total market capitalization of the U.S. stock market at that time was less than $90 billion. However, this was only the beginning of the catastrophe, and in the years that followed, the total market value of New York stocks shrank, at its lowest at $15 billion.
Not only that, but the stock market crash plunged the United States into the biggest economic crisis in history, with 5,500 banks failing and 86,000 businesses going bankrupt in two years; U.S. national income falling from $88 billion in 1929 to $40 billion in 1933; millions of Americans' years of hard-earned savings being wasted...
The 1929 US stock market crash also brought disaster to the world, the global economy ushered in a 10-year-long winter, and the long "bear market" did not end until the mid-1950s!
@Toutiao History@Toutiao Finance@Toutiao Media