The echoes of 1929 in the Wall Street- crash, deflation and depression?
Peter Oberois
Feb. 22, 2007

In the August of 1929, people used to joke in New York about the fools that talk about stock market problems. The parallels are here. The school children are again, since 1987, talking about the stock market. Equities are in the midst of the second-longest rally since 1929. In 1929 as stagnation changed to deflation, the Wall Street party went wild.

The end is not too far, says the analytics based on the sentiment study. The stocks can act like bonds because of special treatment of dividends. But eventually these corporations will have to make some money somewhere. The base is getting weaker. The falling home prices are making people avoid credit cards and malls.

The liquidity is still there. But it is slowly getting drained out to support the faltering stock market and the real estate markets.

There may not be a crash this time. This is a multi decade bear market scenario – not like 1929-33 sharp corrections in overall scheme of a bull market.

The echoes of 1929 in the Wall Street- crash, deflation and depression?
Peter Oberois
In the August of 1929, people used to joke in New York about the fools that talk about stock market problems. The parallels are here. The school children are again since 1987 talking about stock market.
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Toll Brothers result shows deflation hurting real estate badly
Sam Adelton
Real Estate’s biggest trouble is deflation that has engulfed it after the burst of the bubble. Deflation is scary because fear fuels fear.
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Underemployment changing unemployment as deflation become real – the truth behind the jobless claims
Peter Oberois
More importantly, the four-week moving average for claims edged up from 326,700 to 328,000, the highest level for this average since early December....
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Which stocks can outperform during deflation and underemployment?
Jay Hsu
During deflation, stock market collapses. It happened in 1929-34 and also in Japan – 1988-2005. These deflation induced bear markets in economy and stock markets....
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Certain sectors of the stock market has started reacting to deflation and underemployment
Nina Parker
The sectors of the stock market that is facing price war on the downside are actually falling in prices. Those stocks that have some pricing power are advancing.
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While gold is going up on Iranian geopolitics, lack of overwhelming demand in crude oil shows deflation making economy shrink
Fred Day
Oil and gold normally correlates very well. During economic inflation, gold and oil both go up rapidly in prices. This time gold is going up while oil is getting ready for collapse due to lack of global demand.
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Stock market can rise even with deflation – how can that happen?
Mark Osifchin
Deflation in the economy is hidden. Stocks market is reacting like tax-free municipal bond market. The new dividend tax rule changed the stock market into a tax heaven bond market.
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