Name: The great crash, 1929
ISBN: 9780547248165

What Hacker News says

dredmorbiusNov 2024

It was still useful to have a general idea of how stock markets were valued, particularly in light of the events on and about 29 October 1929, a/k/a Black Tuesday. Valuation of equities markets themselves has a profound impact on the monetary and financial systems as a whole.

On which point, John K. Galbraith's The Great Crash: 1929 (1954) remains an excellent history of those events (and notes the DJIA's value frequently), as well as a general primer on equities and investments, and how they may go wrong.

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dredmorbiusSep 2023

One of the counterarguments to exponential growth, particularly in the context of limits, is that growth rises to some constraint. What the country with a higher nominal GDP growth rate does is ... hit that limit sooner rather than later. We've seen countries go through tremendous growth spurts: the UK ~1800 -- 1914; the US ~1870--1970; post-WWII Japan 1945--1990; the "Asian Tigers" of South Korea (particularly contrasted with the North), Hong Kong, Singapore, and Taiwan 1960-2020; and most significantly of all, China 1990--2020. But each of those eventually hit a wall and saw vastly diminished, or no net GDP growth.

To that extent, "rapid growth" seems largely a matter of "reaching your ultimate potential earlier". And the post-rapid-growth phase turns out to have ... interesting challenges: environment, politics, demographics, and more, many of which emerge after sheer growth alone can no longer paper over conflicts or issues which had been present all along.

There's also of course the argument that GDP doesn't measure actual net wealth or common weal, which is a criticism that dates back to the origins of GDP/GNP, and even its creator, Simon Kuznets. There are numerous alternative measures that are proposed. One aspect I've not seen much addressed is that GDP is largely a tool for managing macroeconomic monetary dynamics, that is, as total monetary exchange grows or shrinks, then the monetary base itself must be adjusted, which is the remit of central banks. Those banks can create or destroy money at will (pursuant to policy goals and prime directives), because money itself is not wealth. The knock-on effects are felt profoundly in asset markets, that is, goods or securities whose principle or significant function is to serve as an inflation-resistant store of wealth: stocks, bonds, real estate, precious metals, collectables (art, wine, cars, etc.), and the like. Asset value inflation is not itself economic productivity. It may reflect economic productivity (that's at least the fig leaf covering stock markets), but far more often, asset inflation simply follows national and global monetary policy, most especially rising in times of loose money or easy loans (largely equivalent terms). John Kenneth Galbraith's The Great Crash 1929 remains an excellent post mortem of one such event. To that extent, measuring GDP growth alone provides distorted view of actual wealth growth, both at the level of individuals (say, median, bottom quintile), and of net national power and stability, though of course how distorted is the stuff of legendary disagreements.

There is a history of countries burning through growth potential with immense rapidity, most especially in the case of natural resources extraction. Instability in the Levant following the mid-2000s has been tied to loss of net-exporter status among oil producers (Syria, Egypt, Libya), as well as food scarcity through both climate-related crop shortages and reduced imports as oil revenues decline. One of the more spectacular cases is the Pacific island nation of Nauru, which underwent a birdshit apocalypse after (briefly) highlighting as the world's richest nation (per capita) after what proved to be a highly limited resource reached its limits. <https://www.nytimes.com/1995/12/10/world/a-pacific-island-na...>

The country's recovered somewhat by entering into the hospitality business. That is, it runs internment camps for the refugees Australia would prefer to pretend don't exist and sends elsewhere: <https://devpolicy.org/nauru-riches-to-rags-to-riches-2021041...>

To the extent that contemporary economies run on the basis of extraction (petroleum, coal, natural gas, minerals, groundwater, topsoil) and sink exhaustion (the ozone layer, heavy metal contamination, greenhouse gasses, plastics and endocrine disruptors, habitat and species disruption, ...), none of which are costed into either market transactions or national wealth/income statistics ... well, we're all on busses headed toward various cliffs, some nearer, some further.

One option is to expend resources on things which presently have relatively low value but would be exceedingly useful in a post-carbon / post-collapse society. That includes basic skills, sustainable practices, sustainable infrastructure, and the social patterns which can effectively utilise these. Keep in mind that this runs directly contrary to market signalling as markets have an overwhelming present-bias in assigning values, as anyone caught holding the bag after a crash can tell you. Potential future utility simply isn't considered, and in general, non-market mechanisms seem to be required to encourage such investments.

(There are other systems which similarly fail to consider long-term value, and it's long been a favourite trope to note the immense ecological contamination and pollution which occurred in the Soviet bloc. However similar desecration was seen both earlier and simultaneously under market systems ... both are poor at delivering ecological equity. Ultimate reforms have tended to emerge through social movements, legislation, and legal recourse, none of which are market-based.)

My final argument is that much of the advantages attributed to economic growth can be had at relatively low levels of same. That is, equity and distribution count for far more than total gross production or consumption. Invest in infrastructure, healthcare (with a strong emphasis on basic access and preventive measures rather than heroic interventions), education, affordable housing, social safety nets, and sustainable development of transport, built infrastructure (at individual building, community, regional and national levels), resource preservation and enhancement (e.g., water, soil, forest, and wildlands cultivation), actual productivity, mitigation of undesired consequences, and the like, and ... I think you might see a path which whilst it might not register on mainstream metrics is actually preferable over the long run.

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lamontcgMar 2023

I'd recommend the books by Galbraith -- Money: Whence It Came, Where It Went, The Great Crash 1929, and A Short History of Financial Euphoria.

That is some pretty timeless background.

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dredmorbiusJun 2022

Link to that?

Sounds as if that's somewhat related to J.K. Galbraith's variant of Gresham's Law, in which "bad assets drive out good", during a crash, as the need to cover obligations as bad assets tank leads to sale of quality assets / securities.

From The Great Crash: 1929. One of my favourite books.

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dredmorbiusMay 2022

Assess your investing strategy, goals, timeline, and position.

Can you meet current cash obligations? Can you do so for the forseable future? You have little to worry about.

If you cannot, then look to reduce expenses, increase income, take on debt, or liquidate securities as a last measure to do so.

Investing is like navigating an oil tanker. Responses to inputs are slow, the planning horizon is distant, but mistakes can still be exceedingly catastrophic. Usually you don't want to make sudden movements. Occasionally your hand is forced. You goal first and foremost is to avoid those circumstances.

Look at your asset distribution. Most people should not be 100% in on equities, though the number who are is ... surprisingly high. Many are stubbornly resistant to suggestions to change this distribution, even at points in their investment career where they really should be reducing risks.

One of the classic problems in investing generally is that a sufficiently large market drop can take out otherwise solid investments, as those who'd either leveraged positions elsewhere or rely on balance sheets for other investments find that they are short on cash. If what you need is cash, then what you sell is everything, no matter how low the price. John Kenneth Galbraith's The Great Crash: 1929 covers this and numerous other elements of financial crises in clear and piercing detail. The book is a short and excellent read.

Another element of investing is that the well-capitalised, reasonably-hedged invstor tends to have a greater capacity to weather volatile markets than smaller investors. This tends to result in a transfer of wealth from less to more wealthy, which can ultimately be problematic.

And, especially if you're early in your career, though I'd argue this applies at all ages, look to pensions reform. The notion that individuals presuming market knowledge and absorbing both independent and long-term secular risk is the most sensible way to provide for old-age support is proving to be desperately false, and will be among the largest crises many developed countries face in the next 50 years, with many seeing serious strains now. Corporate pensions made sense in an era of lifetime employment. That world no longer exists. But a new set of institutions which takes on and manages that risk is necessary. This will be a major political battle, and many will suffer tremendously.

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dredmorbiusAug 2021

The primary underwriter of Marketplace has long been GE Capital. That is, the industry the programme is supposed to be watching, pays it.

It is not in the interest of the financial industry to support advocacy for strong regulation against itself.

https://idioms.thefreedictionary.com/He+who+pays+the+piper+c....

John Kenneth Galbraith's The Great Crash: 1929 gives interesting insights into prosecution and hearings following the Wall Street Crash which precipited the Great Depression and previous illegal and self-serving behaviours. I cannot recommend the book highly enough: it's short, highly readable, quite informative, and exquisitely researched.

https://www.worldcat.org/title/great-crash-1929/oclc/1222806...

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