Stock Market Crashes Quotes
He was explaining the thinking of several of the economic protesting movements of the time.
His reference was to economic crises where governments try to restrict outflow of capital, decrease inflationary behavior, invest more money, stop investing money, revaluing the currency, and others—are all hard to do politically and technically as well. Worse, they don’t often work very well.
Born thought that her agency was responsible for regulating the new esoteric financial products—derivatives including credit default swaps—for otherwise there would be no regulation at all of financial products that could dwarf the stock and bond market. Summers persuaded her to back off. When the Meltdown of 2008 hit, the huge derivative exposure of the large banks and some insurance companies was so great that it was one of the major causes for the meltdown of the entire banking system. Summers, normally a great economist not only called this one wrong, but later, along with most other government and private economists ignored a very explicit warning—See {637168}, {637986}, and {620038}.
U. S. Treasury Secretary Larry Summers called Rajan a “Luddite” for this view, but what Rajan observed and predicted was exactly what happened in the Meltdown of 2008 which led to the Great Recession. Rajan was one of the few economists to call this right. Several, invested their own money assuming a crash and made billions. Most, like Summers and the Federal Reserve Chairmen in retrospect admitted that they missed the signs and didn’t connect the dots. See {637168}, {637987}, and {620038}
This is probably the greatest economic understatement of all time. In one of the great ironic touches of history, this is the gentleman that President Herbert Hoover turned to for advice and strategy of coping with the market crash and the Great Depression. Lamont turned out to be one of the worst strategists and economic planners in history. See {608636}. Nonetheless, note the illustration, Lamont made the cover of Time Magazine
He was one of the very few people who warned about the market crash of 1929 and the Great Depression.
When the stock market crashed, the Board of Governors was entertaining the idea of putting a syndicate of banks together or back some financiers who would buy up the stock that people were trying to sell. There were those who wanted to sell but no buyers at any price. They concept of a market was being destroyed. Lamont correctly explained that the idea was not practical—it was too late for that. Lamont however had underestimated the market crash and made a feeble effort to assist President Hoover make his feeble effort to get the American economy going again.
The great scholars were as wrong as everyone else about the Great Depression
Major bankers were not only clueless in the Meltdown of 2008 and the Great Recession that followed, but they were equally hapless in the Market Crash of 1929 and the Great Depression thereafter.
This quotation illustrates how the super rich can actually profit from recessions and market crashes. As long as they are rich enough not to have to sell anything at the depressed prices, they have the operational advantages that Harriman articulates plus they can usually buy more assets cheaply. The super rich generally have been able to do very well in economic crashes while the rest of society usually suffers.
