Bickel Blog

Late yesterday the Wall Street Journal reported: “On average, economists expect the downturn to conclude in June 2009, marking an 18-month duration, the longest postwar period of decline. The economists on average said the unemployment rate will peak at 8.4% in response to this recession.” In a separate set of headlines: “Bernard L. Madoff, a former chairman of the Nasdaq Stock Market and a force in Wall Street trading for nearly 50 years, was arrested by federal agents Thursday… Mr. Madoff told his sons he believed losses from his fraud exceeded $50 billion.” I was not going to cover this chapter of Galbraith’s “ The Great Crash of 1929 ” until later, but these two headlines just make me jump back to page 14- “Aftermath II”… During the book, Galbraith points to a group called the Harvard Economic Society – a group of economists from Harvard. He also points to some other high profile economists from well regarded Universities like Joseph Stagg Lawrence of Princeton and Irving Fisher

Mollie just found out she got accepted to Cornell! Proud Dad!

I just finished reading John Kenneth Galbraith’s “ The Great Crash of 1929 ”. He wrote the book in 1955 and recounted what happened and looked at the reasons why. Very interesting, and while there are many things that are different, there are a number of similarities that I will try to highlight in my next couple of blogs. From Sept. 3, 1929 until Nov. 13, the Times Industrial Index fell from 452 to 224 – almost 50% exactly. Prices stabilized for a while, but continued a long term trend down until they reached their eventual bottom at 58 on July 8, 1932. Meaning $1,000 invested on Sept. 3, 1929 became worth $130. Ouch. So we all know that the Dow Industrials fell from a high of 14,164 on Oct. 9, 2007 to a low of 7,557 on Nov. 21, 2008 – a little less than 50%. Of course the Dow has rallied back to about 8,600 as I write this on Dec. 11, 2008 – an improvement of about 14% above the bottom. Looking back to 1929-30, the Dow Industrials rallied about 29% from a low in 1929 of 228 t