On October 22
he uttered these avuncular statements: "Quotations have not caught
up with real values as yet ... (There is) no cause for a slump ...
The market has not been inflated but merely readjusted..."
Even as the market convulsed on Black Thursday, October 24, 1929 and
on Black Tuesday, October 29 - the New York Times wrote: "Rally at
close cheers brokers, bankers optimistic".
In an editorial on October 26, it blasted rabid speculators and
compliant analysts: ``We shall hear considerably less in the future
of those newly invented conceptions of finance which revised the
principles of political economy with a view solely to fitting the
stock market's vagaries.'' But it ended thus: "(The Federal Reserve
has) insured the soundness of the business situation when the
speculative markets went on the rocks.''
Compare this to Alan Greenspan Congressional testimony this summer:
"While bubbles that burst are scarcely benign, the consequences need
not be catastrophic for the economy ... (The Depression was brought
on by) ensuing failures of policy".
Investors, their equity leveraged with bank and broker loans,
crowded into stocks of exciting "new technologies", such as the
radio and mass electrification. The bull market - especially in
issues of public utilities - was fueled by "mergers, new groupings,
combinations and good earnings" and by corporate purchasing for
"employee stock funds".
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