By Edward Angly, copyright 1931




The Stock Exchange Presidents


E. H. H. Simmons

JANUARY 26, 1930.

The psychological effect of stock market activities on business is, I think, usually overemphasized....  I do not think that the fall in security prices will itself cause any great curtailment in consumption, and the trade figures thus far available seem to bear out this view of the matter.


Simmons�MAY 6, 1931.

Painful though panics and depression may be, they are really curative processes, and herald the advent of firmer foundations upon which to create future periods of prosperity.  The re-establishment of equilibrium in the economic world and the repair of damages wrought by unsettlement are bound to take time if the work is to be lasting.



Just before the the financial meltdown of 2008 really got bad, it was called a

as if, of course, things have to get corrected.


�Lehman Brothers,
internal presentation


The larger question may be: Are there any limits to the policies we will undertake to stave off the dreaded �Recession�� which seems now to be viewed as a disaster on the scale of the 1960s specter of nuclear Armageddon?  But we have to have a recession.  The prosperity of the 2000s was fake, based on massive consumer borrowing on bubble-priced assets.

�Charles R. Morris,
The Two Trillion Dollar Meltdown,
regarding the extremely risky measures that the Federal government is
using to avoid the extreme risks of a major depression

MARCH 2, 2009

The speculators are killing the honest citizens....

But the problem is trillions of dollars of liabilities by the banks, insurance companies and other lenders because of risky instruments that they didn�t even understand themselves, that they sold, that they�re now liable for.

The banks in this country basically played Russian roulette, only with five bullets in the revolver instead of one.  And now they�ve shot themselves.  We�ve got to somehow bring them back to life.

It�s their fault.  They did it to themselves.  But somehow, they�re at the nexus of what�s going on in this country.  We�ve got to rescue them, even though it�s their fault.

�Economist Ben Stein,
on Larry King Live

MARCH 3, 2009

AIG exploited a huge gap in the regulatory system.  There was no oversight of the financial products division.  And I share your concern.  I share your anger.  It�s a terrible situation.  But we�re not doing this to bail out AIG or their shareholders, certainly.  We�re doing this to protect our financial system and to avoid a much more severe crisis in our global economy.

�Ben Bernanke,
Federal Reserve Chairman



OCTOBER 2, 2008

Many of us were told in private conversations that if we voted against this bill on Monday that the sky would fall, the market would drop two or three thousand points the first day, another couple of thousand the second day, and a few members were even told that there would be martial law in America if we voted no.

�Brad Sherman,

Richard Whitney

SEPTEMBER 10, 1930.

With the exception of the difficulties that have arisen as a result of the drastic deflation of commodity prices, the business horizon is clear....  We all know that the present period cannot long endure.

Address before The Merchants Association, New York

Whitney�SEPTEMBER 17, 1930

There have been too many suave statements that reassure nobody, too many empty platitudes, too great a lack of frankness and realism, too much of an attitude of trying to whistle in the graveyard at midnight.

Address before The Merchants Association, New York


MARCH 23, 2009

Parallels with the past are eerie. �No one in 1928 thought that the head of the New York Stock Exchange would end up in Sing Sing (prison) in 1938,� says historian Richard Tedlow of the Harvard Business School.  That was Richard Whitney, convicted of defrauding his clients.  Flash forward: Bernie Madoff, once head of Nasdaq and a member of the financial establishment, goes to the slammer, a confessed swindler.

�Robert J. Samuelson,
Washington Post


                                    �Sykes in the New York Evening Post
January, 1930



Take the above cartoon, replace �BASIC PROSPERITY� with �GOOD FUNDAMENTALS,� and �STOCK MARKET SHOCK� with �FINANCIAL MELTDOWN,� and this cartoon would have looked fine in many newspapers a few months into the financial meltdown of 2008:


The crucial factor [in hindering the prosperity of Iceland] was the iron grip that the Icelandic state had on all business activity through its ownership of the commercial banks.

�David Oddsson
former mayor of Reykjavik and then prime minister, and general Icelandic celebrity

JANUARY 1, 2005

There is no real estate �price bubble.�  The long-term fundamentals for housing remain excellent into the foreseeable future....

The reasons for projecting a continued real estate boom are plentiful:

  • Today�s economic expansion is expected to create healthy job and income gains over the remainder of this decade, boosting home buying activity.

  • Mortgage rates are expected to hover in the 5.5-8.5 percent range for the remainder of this decade because of low inflationary pressures, providing relatively low-cost financing for home buying.

  • Home price appreciation will continue at a healthy pace due to a lean inventory of homes across the nation. [as well as factors that would dissuade the building of more]

  • New projections based on the 2000 Census suggest stronger household growth than anticipated, raising estimates for future home sales.

  • The baby boomer population will continue to age into their peak earning and retirement years throughout the next decade, creating an even greater demand for first and second houses.

  • The high growth of immigrants over the past twenty years will start to pay dividends as they purchase homes in record numbers during the next ten years.

  • The baby boomers� children�the echo generation�will be entering home buying age in dramatic fashion, significantly boosting first-time home buying.

  • The large retiree (seniors) population will live longer due to advances in health care.  Combined with the boomer population, they will create an even greater demand for retirement homes and second (vacation) homes.

  • Led by a number of government- and industry-sponsored housing opportunity (affordability) programs, minority home ownership rates are expected to rise significantly during the next decade.

  • Home ownership costs (e.g., loan underwriting, approval, and closing activities) are expected to continue to fall during the next decade, making it possible for thousands of renters to afford to buy a home.

  • For the foreseeable future, Americans will continue to live in a terrorist-sensitive environment.  Concerns about future terrorist attacks and the economic repercussions from any such attack likely make many investors favor the safe haven of tangible, income-generating assets such as real estate property over stocks, bonds, and other more economically volatile income-generating assets.

�David Lereah, Chief Economist
National Association of Realtors,
one of Time Magazine�s 25 People to Blame for the Financial Crisis,
Are You Missing the Real Estate Boom?




The Greatest Real Estate Bubble in World History

�Charles R. Morris,
The Two Trillion Dollar Meltdown,
title of a section

JANUARY 12, 2009

Some critics pummeled Mr. Lereah for his optimism.  Bloggers nicknamed him �Baghdad Dave,� after the Iraqi information minister Mohammed al-Sahaf, called �Baghdad Bob,� known for his pro-Iraq press briefings at the time of the U.S. invasion....

Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts�then was left to shoulder the blame when things went sour.  �I was there for seven years doing everything they wanted me to,� he said, looking out his window to his tree-filled yard in this Washington suburb.

�Nancy Keates,
Wall Street Journal

OCTOBER. 20, 2005

[House] price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas.

�Ben Bernanke

(Sounds like a summary of Lereah.)

DECEMBER 27, 2008

As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers�.  He rarely questioned them.  A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.

� Peter S. Goodman and Gretchen Morgenson,
Saying Yes, WaMu Built Empire on Shaky Loans,
New York Times

MARCH 15, 2009

Well, I got into economics, because I wanted to make things better for the average person.  When I see a job loss number, 650,000, like we saw last month, I know that�s not just a number.  That�s 650,000 lives that have been disrupted.

�Ben Bernanke,
60 Minutes interview

(Also, the largely laissez faire textbook Principles of Economics, by N. Gregory Mankiw, �But from 2003 to 2005, I had the opportunity to leave the ivory tower and become the chairman of Council for Economic Advisers.  For two years, I was President Bush�s chief economist,� quotes the smartest person in the world, Marilyn vos Savant, as saying, �Yes, but doctors help people one at a time, while an Alan Greenspan can help millions of people at a time.�)

MAY, 2006

Self-fulfilling prophecies, otherwise known as multiple equilibria, in which concerns about an Icelandic financial meltdown could lead to massive withdrawals out of Icelandic assets, which would then lead to a financial meltdown, even if fundamentals do not warrant it, cannot be ruled out.  However, research on multiple equilibria suggests that self-fulfilling prophecies are unlikely to occur when fundamentals are strong, as they are in Iceland.

�Economists Frederic S. Mishkin and Tryggvi Thor Herbertsson

NOVEMBER 8, 2008

REYKJAVIK, Iceland � The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train.  Another said she felt as if she were watching it through a window. Another said, �It feels like you�ve been put in a prison, and you don�t know what you did wrong.�

...�No country has ever crashed as quickly and as badly in peacetime,� said Jon Danielsson, an economist with the London School of Economics.

�New York Times

WINTER, 2008

BB: So some of these high profile companies were based on illusion?

VB: Not in my wildest imagination did I guess accountants wouldn�t see through all this and warn people about it.  It was simply too good to be true that the Icelandic banks had such an outstanding advantage that they could tolerate the super wages and profits they posted.  The banks based their loans on corporate goodwill instead of real value, and that goodwill was largely created by business associates buying companies from each other at inflated prices.

BB: Would you call this a large-scale financial racket?

VB: I would rather use the word megalomania than racket.  Most people thought this was business brilliance.  But there was astounding unethical activity afoot.  Something happened when genetics company deCode was founded and marketed to the public between 1995 and �97.  Normal business procedures were turned upside down.  People suddenly started looking at the deal instead of the product: DeCode managed to sell shares for 15 billion ISK to the public with the assistance of the banks, without even having a defined product to sell.  This money was taken out of the pockets of normal people and never returned.

�Vilhj�lmur Bjarnason,
Icelandic business professor,
Iceland Review

(Those of the �magic of the marketplace� Reagan Revolution seem to be acting from the same playbook:)


During a slow afternoon one day, Beverly Haines, Hansen, and a business associate purchased a small, run-down rural house for $40,000.  Documents on file at the county recorder�s office told us the rest of the story.  The same day the group bought the property they deeded it back and forth among themselves several times, each time raising the recorded value.  (This maneuver is called a �land flip,� and it is illegal if it is being used to defraud a lender.)  The final deed recorded was a trust deed securing an $80,000 loan from Atlas Savings and Loan on the property.

...�I remember one closing we had,� said a real estate salesperson, describing how they flipped land to raise its value.  �It was in the hall of an office building.  The tables were lined all the way down the hall.  The investors were lined up in front of the tables.  The loan officers would close one sale and pass the papers to the next guy.  It looked like kids registering for college.  If any investor raised a question, someone would come over and tell them to leave, they were out of the deal.�  At the end of the day�s flipping, huge loans, based on the inflated values created by the flip sales, would be taken out on the properties.

�Stephen Pizzo, Mary Fricker, and Paul Muolo,
Inside Job: The Looting of America�s Savings and Loans

(James O�Shea�s book The Daisy Chain is all about how common these �daisy chains� of bankers flipping land from one to the other, were in Texas, as if this folksy cooperation was typical of the region, just as S&Ls maximizing exploitative profit through computers was typical for S&Ls in California.)

(and again...)



Why did Enron�s external watchdogs�security analysts, credit-rating agencies, and regulatory agencies�fail to bark?

...A worse fate awaited [accounting firm] Arthur Andersen, which was forced to close its doors after a federal jury convicted the auditor of obstruction of justice in the Enron case.

...According to J. Paul Oxer, former vice president of international development at Azurix [Enron�s water subsidiary]: �The incentive was to make deals happen, not make deals work....  We kept flitting from thing to thing to find the next big deal instead of focusing on operating the company.�

...Enron�s leaders were not, of course, unique in their vulnerability to hubris.  Many successful people and organizations face this peril.  Hubris, in the business setting, typically involves a kind of supreme overconfidence that blocks systematic analysis of opportunities and risks.

...In Enron�s case, hubris was most evident in senior executives� serious misreading of similarities between the natural gas business and the power generation, broadband, and water businesses with respect to price behavior, contracting, distribution, capital requirements, consumer attitudes, and local politics; overestimation of the opportunities and underestimation of the risks of each business; and the exaggerated view of their own ability to compete successfully in multiple product markets with a single business model.  Skilling�s claim at a management retreat that �Enron has found the one successful business model that can be applied to any market� is perhaps the most revealing evidence of leadership�s hubristic, and ultimately destructive, mindset.  Also revealing was Skilling�s claim that EnronOnline was a platform for all kinds of markets, and that �Enron could be the market maker for the world!�  The supreme confidence reflected in this aspirational claim ended up delivering large-scale value destruction for Enron shareholders.

...Thus Enron�s senior executives established few, if any, boundaries for investment ideas, save the general notion that the greatest opportunities lay in deregulating and otherwise inefficient commodity markets.  Such ephemeral boundaries perpetuated the myth of Enron�s ability to do whatever it wanted in the �risk intermediation� business.

...Thus the Project Participation Plan was a pay-for-performance scheme for signing large power plant deals and meeting construction deadlines, rather than for operating profitable businesses for Enron, and the rewards were significant.

...On August 14, 2001, just after Skilling had resigned as CEO, vice president for corporate development Sherron Watkins expressed concern in an unsigned letter to Lay that the company was about to �implode in a wave of accounting scandals,� and that �the business world will consider the past successes [of Enron] nothing but an elaborate accounting hoax.�

...In the fall of 1997, a severe cash crunch and slowing growth drove these senior executives to begin searching for strategies that would preserve the appearance and reality of Enron as a new type of company representing the next stage in U.S. capitalism, in which newly deregulated markets, new ways of thinking, new technologies, and new forms of finance would help America work faster and cheaper and make the folks rich who �got it.�

...This analysis is timely, given widespread evidence that many companies tie executive compensation only weakly to financial performance, and that pay-for-performance schemes often reward short-term rather than long-term performance.

�Malcolm S. Salter,
Innovation Corrupted,
The Origins and Legacy of Enron�s Collapse

MARCH 3, 2007

I still think the fundamentals are very strong on the economy.

�Steve Moore, Member, Wall Street Journal Editorial Board

MAY 17, 2009

All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.

�Ben Bernanke


The fundamentals of America�s economy remain strong.

�George W. Bush

SEPTEMBER 20, 2007

I say that the fundamentals of our economy are strong.

�George W. Bush


I have no interest in bailing out lenders or property speculators...  I can�t think of any situation where the backdrop of the global economy was as healthy as it is today...

�Henry Paulson

FEBRUARY 17, 2009

For a few months subsequent to the August 2007 disruption, the crisis was wholly financial.  The world�s nonfinancial sector balance sheets and cash flows were in as good shape as I can recall.  But, the contagion from the crisis in finance took hold in the fall of 2007.  Global stock prices peaked at the end of October, and then progressively declined for nearly a year into the Lehman crisis.

�Alan Greenspan,
speech to the Economic Club of New York

JANUARY 16, 2008

I�m a guy who looks at the basic fundamentals of the economy.  And I see good things happening...

�Lawrence Kudlow

JANUARY 24, 2008

 [A] lot of this is psychological, a lot of it�s psychological.  Because I believe the fundamentals of our economy is [sic] still strong.

�John McCain

JANUARY 25, 2008

 The U.S. economy is fundamentally strong and will continue to grow in the short term.

�Treasury Secretary Henry Paulson

FEBRUARY 14, 2008

The U.S. economy is fundamentally strong, diverse, and resilient.


APRIL 17, 2008

...the fundamentals of America�s economy are strong.

�John McCain

JULY 20, 2008

...the long-term fundamentals are very solid.


AUGUST 30, 2008

But I also am clear that the fundamentals of our economy are strong.

�Chancellor Alistair Darling

MAY 7, 2009

When people saw house prices rising�and were assured by officials and other experts that they were rising because of favorable �fundamentals��Americans decided that houses were a great investment, and so demand and prices kept on rising.

In fact, prices were rising because interest rates were low.  So when the Federal Reserve (fearing inflation) began pushing interest rates up in 2005, the bubble began leaking air and eventually burst.

�Richard A. Posner,
Wall Street Journal


Henry Ford

NOVEMBER 4, 1929.

Things are better today than they were yesterday.

New York Evening Post

Ford�NOVEMBER 11, 1929.

If people would stop talking about good and bad business and concentrate on normal business, many of the evils of hard times would vanish.

New York Evening Post

APRIL 16, 2008

[A] lot of our problems today, as you know, are psychological.

�John McCain


            ERROR, SAYS FORD



Sees Surplus as Benefit

�New York World, MAY 4, 1930.


DETROIT, August 24 (1931)� Family men employed by the Ford Motor Co. must either become home gardeners or forfeit their positions. This edict was promulgated by Mr. Ford on an inspection trip as a measure to alleviate temporary business depression.

New York Herald Tribune

Ford�JULY 31, 1930

Business will be all right.  I am not in the least pessimistic.  You notice that everybody is anxious to be at work; that is one of the healthiest signs of the times. �  There is no such thing as overproduction.

New York Herald Tribune



I, personally, am very hopeful because I think the country has ceased to be sick, is now well, and will soon be strong and active again.

New York World, AUGUST 17, 1930.

Ford�OCTOBER 3, 1930.

The crash was a good thing....  You watch!

� New York Times.



I have already described why I believe a serious recession is inevitable, and probably even desirable. The credit-fueled, consumer-driven economy of 2002 through 2007 is just not sustainable.  The government response to date�which seems concentrated on getting back to way things worked in 2006�is doomed to failure, while the oceans of money thrown at the banking system to �restore liquidity� could have severe unintended consequences.  The necessary transition is from a credit-driven, consumer-based economy to one characterized by higher savings, higher investment, and less import-dependence.  The scale of that shift is so large that I doubt that it can be navigated without a major recession.

�Charles R. Morris,
The Two Trillion Dollar Meltdown

JANUARY 4, 2009

A search on the Internet suggests two principal criteria for distinguishing a depression from a recession: a decline in real GDP that exceeds 10 percent, or one that lasts more than three years.

�The Economist

NOVEMBER 28, 2008

The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007.  The peak marks the end of the expansion that began in November 2001 and the beginning of a recession.

�National Bureau of Economic Research,
Business Cycle Dating Committee


Ford�MARCH 15, 1931.

These really are good times but only a few know it.

� New York Times

Ford�MARCH 18, 1931.

The average man won�t really do a day�s work unless he is caught and cannot get out of it.  There is plenty of work to do, if people would do it.

New York World-Telegram

Ford�NOVEMBER 19, 1929.

In the Detroit plants of the Ford Motor Co. employment has rapidly decreased during the past several weeks.

�New York Times

Ford�APRIL 28, 1931.

Of the Ford employees 32% now are on the full 5-day week; 18% are working four days; and 50% are still on the 3-day week.

Wall Street Journal

Ford�AUGUST 12, 1931.

Henry Ford has shut down his Detroit automobile factories almost completely.  At least 75,000 men have been thrown out of work.

The Nation

Arthur Brisbane

Those that foolishly talk about a national panic, will please remember that the income of this nation is one hundred billion dollars a year.

�OCTOBER 30, 1929.


To comfort yourself, if you lost, think of the people living near Mount Pelee, ordered to abandon their homes.

�NOVEMBER 9, 1929.


Business is good, money is cheap.

�NOVEMBER 16, 1929.


It ought to be a good year.

�NOVEMBER 20, 1929.


All the really important millionaires are planning to continue prosperity.

�NOVEMBER 26, 1929.


If every man would learn to talk about the country�s progress and future as a young mother talks about her new baby, there would be no danger of hard times.

�DECEMBER 3, 1929.


Now that the �big wind� that swept through Wall Street, blowing away paper profits, has died down, there are sad hearts, but no real losses.

�JANUARY 1, 1930.


Fortunately, it seems safe to say that the peak of idleness has about been reached, with better conditions coming.

�JANUARY 8, 1930.


Uncle Sam feels prosperous.   Last Saturday he had a surplus of $223,000,000.

�JUNE 25, 1930.


Sometimes when things go wrong, it is a comfort to be reminded that nothing matters very much. If the earth fell toward the sun, it would melt like a flake of snow falling on a red-hot stove.

�JANUARY 2, 1931.


This country hasn�t lost anything, except a few billion dollars.

�JULY 10, 1931.


Labor that objects to wage reductions may find some comfort in the fact that a ten per cent reduction may mean before long one hundred per cent increase in general prosperity.

SEPTEMBER 24, 1931.


The Chase National absorbed the Equitable Trust Company, as the National City absorbed the Farmer�s Loan & Trust Co.... you can get all the money you want, up to a hundred million or more, if you have the right collateral and enough of it.

OCTOBER 3, 1931.


JULY 9, 2008

You�ve heard of mental depression; this is a mental recession....  We have sort of become a nation of whiners....  Thank God the economy is not as bad as you read in the newspaper every day.

�Former Senator Phil Gramm

NOVEMBER 28, 2008

The committee identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession.

�Business Cycle Dating Committee,
National Bureau of Economic Research

NOVEMBER 16, 2008

[Gramm] studied the Great Depression, producing research rejecting the conventional wisdom that suicides surged after the market crashed.

�New York Times


God, grant me serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.  Living one day at a time, enjoying one moment at a time; Accepting hardship as a pathway to peace; Taking as Jesus did this sinful world as it is not as I would have it; Trusting that You will make all things right if I surrender to Your will; So that I may be reasonably happy in this life and supremely happy with You forever in the next�Amen.

�the unredacted version of our favorite formula for coping, as originally written by Reinhold Niebuhr



SEPTEMBER 17, 2008

OCTOBER 19, 2008

Today I Will Trust

Today, I will stop straining to know what I don�t know.
To see what I can�t see.
To understand what I don�t yet understand.
I will trust that being is sufficient,
And I will let go of my need to figure things out.

�Hazelden addiction treatment center,
Today�s Gift daily e-mail�
from Melody Beattie�s book The Language of Letting Go
(she usually writes about codependency)


The black Delta sharecropper, the white mountain tenant farmer, and the chronically unemployed and dispossessed believe, with good reason, that their living conditions will never improve and thus are comforted by religious fatalism.  One hears statements in rural Appalachia such as �This is God�s will,� �God will not put more on you than you can take,� and �Blessed are the poor....�

Armando T. Morales and Bradford W. Sheafor,
Social Work, a Profession of Many Faces

FEBRUARY 4, 2009

It was the worst five years of my life [when I was homeless]. And�but it was also the best, because I actually had to fight back.  My wife and I just really fought back hard.  Donald Trump is my friend.  He�s never been homeless, but he�s lost a billion dollars.  And what Donald and I say really is the time to self-assess, to learn, to come forward, you know, to get stronger, get smarter.  I don�t want Obama to save me.  I don�t want hope.

I think it�s time for us to get smarter and wiser and not expect the government to take care of us.

�Robert Kiyosaki,
author of Rich Brother, Rich Sister, Two Paths to God Money and Happiness,
on Larry King Live,
in a discussion about the financial meltdown

FEBRUARY 4, 2009

And let�s face it, Larry, we are in a depression.

And if they didn�t do the bailout, you would be in depression number two and maybe just as big as depression number one.

�Donald Trump,
in that same discussion on Larry King Live

OCTOBER 1, 2008

[Nancy] Molitor [psychologist and public education coordinator for the American Psychological Association] worked with one young woman who was so anxious she was staying home from work.

�She was using up her sick days because she felt too stressed to go to work,� Molitor said. �She had survived layoffs at her company, but that left her to do the jobs of two to three people who were gone.  She had run up credit card debt of close to $10,000 and had school loans to pay off.�

The woman was treated for a work phobia that required medication, said Molitor.



off the cover of Psychology Today

(Well-trained people are more serene and well-adjusted.)

(The cover of June, 2009�s Psychology Today had a picture of a woman in a knight�s armor, with the main article mentioned on the cover being, �THE HARD KNOCKS SURVIVAL GUIDE, 9 Ways to Overcome Failure,� along with, �Plus: The Girl Who Had It All�And Married A Monster,� and, �CONQUER MONEY WORRIES.�)

DECEMBER 24, 2008

What we have done in this current turmoil is stay calm, which has been our greatest contribution�not being impulsive, not changing the rules willy-nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants. [This caution] has really been a signal achievement for the SEC.

�Christopher Cox,
Chairman of the Securities and Exchange Commission


If you have depression, this sad mood along with other symptoms can last weeks, months, or even years if not treated.  Depression isn�t a sign of weakness or a character flaw.  It�s a real medical condition, but there are ways to successfully treat depression....  Depressive disorders affect about 34 million American adults.

Zoloft webpage







The Bush administration took a lot of pride that homeownership had reached historic highs.  But what we forgot in the process was that it has to be done in the context of people being able to afford their house.  We now realize there was a high cost.

�John W. Snow
Former Treasury Secretary

(We must be careful about possible unintended consequences, which are usually also unpredictable, even if it means letting Madoff get away with it, etc., especially since the consequences of guv�mint actions are usually the unintended consequences we care about.  The unintended consequences of not doing enough, seem to be merely what happened naturally, even if this means very unnatural rates of depression, anxiety disorders, etc.)


Roger W. Babson

Sooner or later a crash is coming which will take in the leading stocks and cause a decline of from 60 to 80 points in the Dow-Jones barometer.

�SEPTEMBER 5, 1929.


I believe that many who have been caught [in the first crash] could recoup some of their losses by now buying good bonds.

�OCTOBER 22, 1929.


OMAHA, Aug. 18 (1930) � Roger W. Babson, economist, today said Midwestern agriculture is on the upgrade and general business in this region should show marked improvement during the final quarter of 1930.

�The corner has been turned in the Middle West,� he said.  �Conditions are as bad out here as they will get.  The farmer is flat on his back, and there is no way to look except up.�

News item.


                           Aug. 18, 1930       1931
                                   close         low to date

�Farm� Stock
J. I. Case Co.              176 1/2          33 1/4
   Int�l Harvester              75 1/2          22 1/2
   Sears-Roebuck                62              31
Chicago Grain Market
Dec. Wheat                  .88 1/8         .44 5/8
   Dec. Corn                   .90 1/4         .32 7/8
   Dec. Oats                   .42 1/2         .20 1/4

Roger W. Babson


DECEMBER 26, 1930

In a big way, 1931 can be described as a year of opportunities.  In 1929 we were living in a palace with a powder mine in the cellar.  In 1931 we may feel sure that we are living in a poor house with a gold mine in the cellar.

Babson�MAY 9, 1931

Statistics show clearly that business reached its low point in December of last year.  Since then there has been a steady but constant improvement.  Everything indicates that general business has turned the corner.  ... I go further and say that 1931 should offer the greatest opportunities of any year for generations.

Irving Fisher

SEPTEMBER 5, 1929.

There may be a recession in stock prices, but not anything in the nature of a crash.  Dividend returns on stocks are moving higher. This is not due to receding prices for stocks, and will not be hastened by any anticipated crash, the possibility of which I fail to see.

A few years ago people were as much afraid of common stocks as they were of a red-hot poker. In the popular mind there was a tremendous risk in common stocks.  Why?  Mainly because the average investor could afford to invest in only one common stock.  Today he obtains wide and well managed diversification of stock holdings by purchasing shares in good investment trusts.

New York Herald Tribune

                       SOME INVESTMENT TRUSTS

                                      Sept. 5, 1929         1931
                                             close           low to date*

American International Corp.              84                6

American, British & Continental           14 1/2            1

Electric Power Associates                 74                5 1/2

Goldman Sachs Trading Corp.              110                2 1/2

General Public Service                    83                4 3/8

Selected Industries, Inc.                 25 1/2            1

U S. & Foreign Securities Corp.           64 1/2            1 7/8

* Only to Oct. 25.


JULY 22, 2002

Federal Reserve Board Chairman Alan Greenspan�s testimony before Congress last week refutes, once and for all, the existence of an alleged housing market �bubble,� said chief economists of the National Association of Realtors(R) and the National Association of Home Builders, two trade groups that collectively represent more than 1 million professionals from all walks of the housing industry.

...Asked about the issue during his testimony, Greenspan said, �We�ve looked at the bubble question and we�ve concluded that it is most unlikely.�  He attributed recent �sizeable gains� in home prices to �the effects on demand of low mortgage rates, immigration and shortages of buildable land.�

Business Wire

MAY 12, 2009

Mr. Greenspan was asked after a speech to a National Association of Realtors conference whether, in hindsight, he thought interest rates should have risen more when he was chairman earlier this decade.

He responded that housing activity is driven by long-term rates, and not the overnight rates set by the Fed.  The housing boom, he added, actually began in 2000, one year before the Fed started cutting interest rates in 2001.

�I think there is a recalibration of financial history that I find very puzzling,� Mr. Greenspan said.

Wall Street Journal

JUNE 2004

No sign of a national home price bubble. ...the likelihood of a decline in home prices at the national level is quite remote.

�Joint Conclusion, Chief Economists of Fannie Mae,
Freddie Mac, National Association of Realtors,
Independent Community Bankers of
America, and National Association
of Home Builders
�America �s Home Forecast�

JANUARY 1, 2005

There�s no price bubble in this country.

�David Lereah

JANUARY 1, 2005

There�s not going to be a crash.

�Doug Duncan
Mortgage Bankers Association

MAY 28, 2005

There�s no national house price bubble.

�Frank Nothaft, Chief Economist
Freddie Mac

JUNE 9, 2005

There can be little doubt that exceptionally low interest rates on 10-year Treasury notes, and hence on home mortgages, have been a major factor in the recent surge of homebuilding and home turnover, and especially in the steep climb in home prices.

Although a �bubble� in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels.

�Alan Greenspan,
to the Joint Economic Committee

MARCH 11, 2009

There are at least two broad and competing explanations of the origins of this crisis.  The first is that the �easy money� policies of the Federal Reserve produced the U.S. housing bubble that is at the core of today�s financial mess.

The second, and far more credible, explanation agrees that it was indeed lower interest rates that spawned the speculative euphoria.  However, the interest rate that mattered was not the federal-funds rate, but the rate on long-term, fixed-rate mortgages.  Between 2002 and 2005, home mortgage rates led U.S. home price change by 11 months.  This correlation between home prices and mortgage rates was highly significant, and a far better indicator of rising home prices than the fed-funds rate.

...The result was a surge in growth in China and a large number of other emerging market economies that led to an excess of global intended savings relative to intended capital investment.  That ex ante excess of savings propelled global long-term interest rates progressively lower between early 2000 and 2005.

�Alan Greenspan,
Wall Street Journal

DECEMBER 24, 2005

The facts don�t support a national bubble.

�Richard Smith, Chairman & CEO
Cendant Real Estate

SEPTEMBER 30, 2008

The $54.6 trillion in [Credit Default Swap] contracts completely dwarfs total corporate debt, which the Securities Industry and Financial Markets Association puts at $6.2 trillion, and the $10 trillion it counts in all forms of asset-backed debt.

�It�s sort of like I think you�re a bad driver and you�re going to crash your car,� says Greenberger, formerly of the [Commodity Futures Trading Commission].  �So I go to an insurance company and get collision insurance on your car because I think it�ll crash and I�ll collect on it.�

Fortune Magazine website

NOVEMBER 9, 2007

Perhaps as the presidential campaign heats up and moves to the front page, negative articles about housing will move off the front page.  Then, hopefully, the positive underpinnings of low interest rates, low unemployment and a decent economy will raise new-home-buyer confidence.

�Robert I. Toll, CEO
 Toll Brothers luxury homebuilders

NOVEMBER 20, 2008

This year we celebrate the desacralized �holidays� amid what is for many unprecedented economic ruin � fortunes halved, jobs lost, homes foreclosed.  People wonder, What happened?  One man�s theory: A nation whose people can�t say �Merry Christmas� is a nation capable of ruining its own economy.

�Wall Street Journal




Irving Fisher�CONTINUED

OCTOBER 16, 1929.

Stock prices have reached what looks like a permanently high plateau.  I do not feel that there will soon, if ever, be a fifty or sixty point break below present levels, such as Mr. Babson has predicted.

I expect to see the stock market a good deal higher than it is today within a few months.


Fisher�OCTOBER 22, 1929.

I believe the breaks of the last few days have driven stocks down to hard rock.  I believe that we will have a ragged market for a few weeks and then the beginning of a mild bull movement that will gain momentum next year....

New York Herald Tribune

Fisher�OCTOBER 24, 1929.

If it is true that 15 billions in stock quotation losses have been suffered in the present break I have no hesitation in saying values are too low.

New York Herald Tribune

Fisher�OCTOBER 25, 1929.

12,894,650 Share Day
Swamps Markets

�New York Times



Holds Prices Still Are �Absurdly Low�

�New York Herald Tribune

Fisher�NOVEMBER 13, 1929.

�Big Board� and Curb Show 491
New Lows

New York Herald Tribune


NOVEMBER 24, 2008

Those who want to understand the [current economic] mechanism might ponder Irving Fisher�s comment in 1933: When it comes to booms gone bust, �over-investment and over-speculation are often important; but they would have far less serious results were they not conducted with borrowed money.�

�Wall Street Journal


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Cancer Victims Corrected Too

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Darwinist Lehman Brothers� INSIDE Sales Tips

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Out of the Same Mold as the Great Crash of 2008

Message for Intellectuals in the Islamic World

Candace Newmaker�s Experience

Breaking Important Confidences for Your Own Good

A Glimpse Into the Soul of Victim Correction

Cigarette Industry and Victim Correction

Niebuhr�s Ideas on Our Nature and Destiny

Herbal Experiences for Women

Some Ideas for Rapport