Comments on: Comparing The Right Economic Crisis

By: Canadian Stock Rankings, Investing in ETFs, and Studio Tax

Canadian Stock Rankings, Investing in ETFs, and Studio Tax — Mon, 17 May 2010 17:46:10 +0000

[...] The Financial Blogger has a good post about why the current economic crisis is NOT like the great depression of 1929. [...]

By: IS

IS — Thu, 05 Feb 2009 03:30:08 +0000

Interesting points, and I think there are always opportunities, they are simply a bit more difficult to find in such environments. I’ll say that 2008 was a tough year for almost every investment (except government bonds perhaps), but I think 2009 will provide great opportunities!!

Given that I’m unsure about the direction of the market in the next few weeks, I’m concentrating on long/short picks!

By: Frank

Frank — Wed, 04 Feb 2009 19:10:24 +0000

The Wall Street Crash of October 1929 may have provoked a financial economic crisis, but most economists agreed that it was trade protectionism and higher taxes which followed that turned the crash into the Great Depression. High deflation caused a further deepening of the depression.

Yes, there are some similarities between today’s headlines and the 1930s. But today, we have some understanding of what happened before and hopefully we have “learned from the past”. We can observe a change in the Government and the Fed’s response. However, their responses are critical determinants of the speed and vigour of the recovery. Don’t bring a knife to a gunfight! I prefer to watch the parade, cause it’s early to tell if it’s just a normal bear market after a very bullish one!

By: The Financial Blogger

The Financial Blogger — Wed, 04 Feb 2009 15:37:45 +0000

Traciatim,

I didn’t think of this… I would have to check the numbers back in 1929 and see how they were calculated compared as today. very good point!

By: Traciatim

Traciatim — Wed, 04 Feb 2009 15:06:35 +0000

“Did you check what the unemployment rate was during 1929 to 1934? It was between 25% and 35%. We are currently surfing between 6 and 7%. Therefore, people are still working, still paying their bills and still eating. So there is no panic on this side.”

Are you comparing the same metric? I thought back then the unemployed rate was simply the inverse of the employed rate, which is not the case today. These days they remove all the not working people to show unemployed as only a very specific set of people who are looking for work.

By: Richard

Richard — Wed, 04 Feb 2009 14:56:35 +0000

As for when it is a good time to invest, I’ll let you know 2 weeks after I do because I want to make sure that was the best time.

To be honest, and I know you know this, one should never have gotten out of the market. Notable exception being those in retirement with out guarantees and those within 5-10 years of retirement. They should have already been moved to more conservative stances.

As for why this happened…. GREED.

Companies created securities out of debt that was given to people who did not have the ability to even pay it. Granted it was time for a correction anyways, but those greedy bastards helped push it over the edge into this “great depression” we are in.

Which reminds me, I’ve lived through several recessions, and this doesn’t even feel like one of those.