The second great crash...

30 July 2008:


Today: … imple.html

Aside from the merits or otherwise in using technical analysis in a market as volatile and influenced as this one is, does anyone else get a bad feeling about the whole margin call thing? As Galbraith points out, margin calls have a cascading effect as margin clerks don’t care what price they get. Hedge funds (many of which operate much like the trust funds of the 1920s, as far as I can see) are seeing record redemptions and may be liquidating positions as fast as they can. Individual pension holders are pension trustees are rightly upset at the performance of their pensions and are moving their equity funds to more secure assets. Is there any reason for this to stop?

That is a great book. i bought it years ago and lost it and bought it again recently.

Galbraith had a great knack of explaining things in relatively simple language. That being said The Affluent Society can be quite tough at times.

i think before this is over LIBOR as a concept will have to be disconnected from the ordinary Joe Soaps in the street. It’s no use in charging Bill Abong say 3% plus LIBOR on his mortgage. In current conditions he can’t keep up payments more reasonable to use ECB or Bank Of England rate plus 1% as the yardstick. Otherwise madness reigns.

I just bought it last week. I read it before, but wanted to reread.

Some lovely videos from 1929 on the big picture blog: … tones.html

Did you see ‘Cinderella Man’? It gives my wife heeby-jebies. One day nice house, everything for the kids, nice job, plenty of cash and the next day fighting for a piece of salami. It’d break her heart if she couldn’t afford to feed our kids.

a) He’s totally baked
b) “If this lesson is learnt”… 'fair not pops…
c) She’s totally baked too…
d) $25,000 in 1929 for a coat?!
e) Not exactly CNBC is it?

(Interesting videos though!)