Sunday, September 16, 2007

Get Rich Quickly With Minimum Physical Effort

The Bursting Asset Bubbles - Wall Street, October 1929
"Between 1925 and 1929, the number of manufacturing establishments increased from 183,900 to 206,700; the value of their output rose from $60.8 billions to $68 billions. The Federal Reserve index of industrial production which had averaged only 67 in 1921 ... had risen to 110 by July 1928, and it reached 126 in June 1929 ... (but the American people) were also displaying an inordinate desire to get rich quickly with a minimum of physical effort."

Personal borrowing for consumption peaked in 1928 - though the administration, unlike today, maintained twin fiscal and current account surpluses and the USA was a large net creditor. Charles Kettering, head of the research division of General Motors described consumeritis thus, just days before the crash: "The key to economic prosperity is the organized creation of dissatisfaction."

Inequality skyrocketed. While output per man-hour shot up by 32 percent between 1923 and 1929, wages crept up only 8 percent. In 1929, the top 0.1 percent of the population earned as much as the bottom 42 percent. Business-friendly administrations reduced by 70 percent the exorbitant taxes paid by those with an income of more than $1 million. But in the summer of 1929, businesses reported sharp increases in inventories. It was the beginning of the end.

Maybe low interest rates and a booming economy will save us.

What Caused the Great Depression of the 1930's?
With artificially low interest rates and a booming economy people and companies were more apt than ever to invest in grandiose business expansions and over-priced stocks. Mergers and acquisitions soared.

Then again, maybe not. What about mergers and acquisitions? Here's an article from late 2006.

Record Year For M&A Deals, Study Says
Technology mergers and acquisitions are valued higher this year than any year since the bust, according to a new study.

Oh well. We should be fine as long as the homemakers don't jump in with both feet though, right?

Homemaker-traders in Japan sweat as markets reel
When the turmoil struck the currency markets last month, Itoh spent a sleepless week as market losses wiped out her holdings. She lost nearly all her family's $100,000 in savings.

Some analysts point out that the $2.5 billion that Japanese individuals lost in August was just a fraction of a percent of the overall household savings.

"It is about the same as what Japan spends in two weeks on horse racing, lotteries and pachinko," said Tohru Sasaki, chief foreign-exchange strategist at JPMorgan Chase Bank.



Anonymous said...

I'm sure Itoh was comforted by Mr. Sasaki's comments. Open mouth, insert foot. Looks like corporate finance big-wigs in Japan have to undergo the same lobotomy procedure as their counterparts in the US.

Stagflationary Mark said...


I found it interesting that Mr. Sasaki, being a chief foreign-exchange strategist, even went down the "horse racing, lotteries and pachinko" path.

Online Pachinko Tips
Online Pachinko is gaining such popularity that it seems appropriate to write a strategy article to help avid Pachinko players out there to maximize your profits. Unfortunately the reality is that although Pachinko is great fun and highly addictive, there isn't any real strategy that you can employ to increase your chances of winning.

Then again, maybe it is exactly like currency "investing." D'oh!

Anonymous said...

The US government will give Jordan 78 million dollars in extra aid to help its ally accommodate hundreds of thousands of Iraqi refugees and fight terrorism, the US embassy said on Sunday.;_ylt=AoQbENfXT9ksUT81aqbBVqus0NUE

So basically the US government is going to borrow 78 million dollars from foreigners and give it to Jordan. How can it be any other way?

Stagflationary Mark said...


We're just biding time until China sets up a governmental payday loan center in the White House.

The payday loan center will allow the president to spend up to two weeks pay the next time an emergency pops up.