What Greece is going through currently is far more orderly than the Crash of 1929. The country had been on a high of sorts. It was post-war optimism, and it had taken the form of the Roaring Twenties. The US was experiencing a period of wealth and excess, which brought rural Americans to cities seeking better opportunity and a chance at the high life.
The mass emigration looked great for cities, which would benefit from a labor force and increased spending in the area, but the rural parts of America were left to neglect. Today, this is viewed as one of the key factors behind The Great Depression.
Like most optimistic investors of today, America was collectively swept up in the idea that the Stock Market had nowhere to go but up. After all, the NYSE had long held the title of the most important stock exchange in the world. That made New York the financial capital of everything, which meant nothing could crumble the foundations.
Maybe it was arrogance or ignorance in the face of a decade of decadence. Steel production was experiencing a serious decline while consumer debt was rising. Construction was near standstill, and automobile sales were plunging. Even in the face of all of this evidence, stocks continued to rise into early September of 1929.
A warning came, and was well publicized, but it might have been too late to make a difference. Prices abruptly began to fall around September 18th, and by September 20th the London Stock Exchange had crashed entirely. The effect was felt across the pond as investor confidence plummeted, and the NYSE finally hit bottom on a day known as Black Tuesday.
About the Author: Phineas Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Phineas Upham website or LinkedIn page.
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