Safehaven | For The Record: 2008, 1929 and 1873 Bubbles

January 09, 2009

For The Record: 2008, 1929 and 1873 Bubbles
by Bob Hoye

The establishment promised that nothing could go wrong.

"The truth is that Fed governors, together with their crack staff of Ph.D economists and market analysts, are as close to an economic dream team as we are ever likely to see."

- Gregory Mankiw, Harvard economist and textbook author,
New York Times, December 23, 2007

"So Congress tried to make sure it would never happen again by creating a system of regulations and guarantees that provided a safety net for the financial system."

- Paul Krugman, explaining interventionist measures installed
after the 1929 debacle.
New York Times, March 21, 2008

But it did!

Scott Stantis, Alabama, The Birmingham News

CRASHES PERCENTAGE CHANGES
(DJIA CLOSE)

	High	Initial Low	Rebound	Final Low	Full Decline
2007	14165	8176 Oct. 27	9625 Nov. 4	7552 Nov. 20
		-42%	+17.7%	-21.5%	-47%
1929	381	230 Oct. 29	258 Nov. 4	199 Nov. 13
		-40%	+12%	-23%	-48%

	1873	1929	2008
Start of Crash	Early Sept.	Sept. 3	Aug. 28
• First Selling Concern	Ended Sept. 19	Ended Sept. 21	No Pause
• Heaviest Liquidation	Last Part of Oct.	Oct. 29	Oct. 27
• Low Volume Final Panic	Nov. 8	Nov. 13	Nov. 20
• Rebound Top	May 1874	April 17/30	? ?
• Bear Market Low	Mid 1877	Mid 1932	? ?

Bob Hoye
Institutional Advisors

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each securitys price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance.

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