Tomorrow is the anniversary of Black Thursday. October 24, 1929 marked the beginning of the Wall Street crash, and the first sign of what would become the Great Depression. Reading just about every newspaper these days, you're forgiven for thinking 2008 may be the next 1929. But according to Jason Zweig in The Wall Street Journal, it might not be time to stock up on rice and beans quite yet.
In fact, the market is probably wrong again in its obsession over whether this decline will turn into a cataclysmic collapse. Eugene White, an economics professor at Rutgers University who is an expert on the crash of 1929 and its aftermath, thinks that the only real similarity between today's climate and the Great Depression is that, once again, "the market is moving on fear, not facts." As bumbling as its response so far may seem, the government's actions in 2008 are "way different" from the hands-off mentality of the Hoover administration and the rigid detachment of the Federal Reserve in 1929 through 1932. "Policymakers are making much wiser decisions," says Prof. White, "and we are moving in the right direction."
You don't have to look far to smell the fear in the markets today, and to see its effects on stocks. How are you handling it... Are you hunkering down, or starting to snap up the bargains?