1929 vs. 1999

[Enrique Diaz-Alvarez]

Doug Henwood wrote:
> 
> 
> No, I don't think daytrading on the web will bring about armageddon. I just
> see it as another symptom of a collective mania with few historical
> precedents. Certainly the late 1920s, maybe the late 1960s - but what else?
> nature of excessive trading aren't part of the nonsense.

Oh, no, Al the Bubblemeister is right. This time _is_ different:

- In 1929, the US was a creditor nation with a trade surplus. Today it
is a net debtor, to the tune of 20% of GDP, and has a large and growing
trade deficit. 

- In 1929, P/E ratio was 20 and profits were growing at a healthy pace.
Today it is 32, profits have been stagnant for a couple of years, and
are now declining.

- In 1929, productivity was growing rapidly. Today, productivity growth
sucks. (Not to worry, though; new numbers are being made up even as we
speak).

- In 1929, less than 5% of the population participated directly in the
stock bubble. Today it is probably around 50%.

-- 
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