Oct 24, 2009

Black Thursday

Happy Black Thursday, which was the official kickoff for The Great Depression, a time when everyone could play the stock market with ten percent down. You have a dollar, the brokerage gives you nine with an invitation to invest.

A mere 69 years later, Long Term Capital Management took a spiral into insolvency having been given 25 dollars for every dollar they invested. The Mighty Bear (Sterns) went down with 33 dollars lent to them for every dollar invested. Lehman would borrow as much as 60 dollars for every dollar invested.

History repeats itself, just never exactly and precisely.

I was looking around for literary notes about The Great Depression. P. G. Wodehouse moved to Hollywood in 1930 and cheerfully pocketed $1700 a week from a studio. Faulkner was able to buy Rowan Oak for a discount because of the bad times. Hal Smith, Faulkner's publisher, originally refused to publish Sanctuary, which included a rape by corncob. Smith thought the novel would land them in jail. But with the onset of The Great Depression, Smith re-evaluated his position and decided the novel was just the thing to help them out of their financial trouble.

How times have changed, sort of.