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1929 CRASH opinions- have your say

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Not applicable
in 1929 the big crash lost 89% from 1929 -1932 that was devastating in approximately 4 months we lost an average of 40% with some quaters still saying it is not a crash the same guys were being technical in the begining saying a loss of 20% constitutes a crash. what can happen in 3 years a guestimate does not look pretty lucky for us we have ssfs and put warrants otherwise we would be jumping out of windows omo any thoughts from our esteemed forumites
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6 REPLIES 6
Not applicable
I just love strongly trending markets. Have ridden Angloplat down from R850 to R38x R39x where it is currently. Beauty is you just leave it (which I did not do with Satrix 40). Don't get sucked into short-term fluctuations unless a major EMA is broken AND fundamental outlooks start looking up.
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_nova
Super Contributor
Well said Vitorc. And LN? history is repeating itself. In 1929 the DOW after the initial crash, the DOW rallied a bit, then made a second bottom which begat a second rally off the double bottom and only then toward May of 1930 did the real drop begin which took the DOW -89% down right through to middle 1932. The second, bigger drop came off the back that realisation finally set in that credit was simply not available, that company earnings were gone, and that those who still had cash were simply not lending it to those who needed it. It was the credit bubble and the subsequent credit squeeze that broke the DOW's back in the 2nd slow and merciless drop. It was this and the resulting deflation that brought consumers and businesses to their knees. A little known, or rather acknowledged) fact is that the Fed in those days did in fact step in and provide liquidity. The problem was that the banks hoarded any cash they got. They would only lend to people and businesses who didn't need loans, but not to anyone who needed it since the risk was too high. The exact, but exact same thing is happening today and it's got BB's knivkers in a knot because he can't force the banks to lend. Right now the Fed has exactly two bullets left to stave off a depression [1] a rate cut (which I don't believe will help much) and [2] bail out mortgages. If that doesn't work, then it's the 1930's all over again, just worse
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Shard
Super Contributor
Fed shouldn't be handing money out. It should be stepping in after a bank goes under to insure that the public doesn't lose out. Greedy banks with poor governance should be wiped off the face of the earth.
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Not applicable
Just a thought - at the time of the 1929 crash PE's were on average in the stratosphere, I think in the 50's but I stand to correction. I think our ALSI got to about 17/18 in May this year, and our resources got to the late 20's. Both are now in the single digits. So, I don't believe we'll fall as hard as 1929, nor do I believe that we'll take as long to recover, credit crisis or not.
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Robbie
Regular Contributor
Agree - only problem is that I lost too much before I realized how bad it is. Since 10 days ago I started selling off aggressively and hope to be completely out by the end of the week - out of 32 companies. Any Bear market have green days, which will help to get out. In addition to the expected continous decline, we here in SA also have the "Africa Factor' which will hit the JSE very hard sooner or later.
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Not applicable
guess the banks never lose they get themselves into it by lending and leveraging when things go bad they go yto trhe govt and keep that money for themselves like a mugabe syndrome dont u think i think banks should crumble if they have been negligent and greedy and the govt should save the people to promote liquidity cos the banks wont do that but line their pockets i think the same should happen to s a to some extent due to banking charges and trumped up charges, if u got no money in your acct they charge you penalties for debt orders , can u tell me the cost to maintain admin systems equate to 105 rands a time i dont think so to stand in the que at the bank costs you approx R20 and we all fORCED TO USE THEM omho
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