Transmigrated as the Crown Prince

October 24, 1929 was later known as Black Thursday.

The stock market, which had been rising since the summer of 1919, had risen to 449 points in 1928, reaching an unprecedented peak. More and more Americans are investing their life savings in the stock market, and stock gods are appearing wholesale. It can be said that the stock market is ushering in a hot summer.

Unfortunately, summer is here, can winter be far behind?

In June, seven universities in the United States, including Brown University, Columbia University, Cornell University, Harvard University, Princeton University, University of Pennsylvania, and Yale University, jointly issued an infamous statement: “The evaluation of millions of investors on New York Securities The amazing market of the exchanges has worked, and their unanimous judgment shows that the current stock price is not overvalued...the stock price will reach and maintain a permanent high level."

In August, broker loans had reached $17 billion, and the crazy farce on Wall Street was not over yet. People still naively believe that there is no end to the prosperity of the market. However, prosperity eventually comes to an end, only risk has no end. And precisely because the risks are unknown, it is even scarier.

In the first week of September, the market suddenly began to jump up and down. Although many parties temporarily held their ground in the competition, the cloud of market collapse had quietly enveloped Wall Street.

On September 5, Babson, a non-famous "statistician" in the United States, delivered a speech at the annual meeting of the National Business Federation: A crash will happen sooner or later, and it will be difficult to contain. Like a curse, at 2 p.m. that day, the New York Stock Exchange dropped hugely.

Who is Babson, who has such mysterious power?

In fact, Babson is not a famous stock commentator at all. He has a dazzling list of names: educator, philosophy enthusiast, religious person, statistician, astrology enthusiast, economics enthusiast and supporter of the law of gravity. ...In short, this person is a "big liar"!

In hindsight, the market fell not because of Babson's genius prediction, but because after the market fell, people discovered that Babson had once made such wild remarks.

Wall Street is also organizing forces to fight back against Babson, but there is a problem in the real economy of the United States. Because the industrial production index, steel production, and transportation volume have all declined, depression has inevitably become one of the topics discussed. Some people who responded quickly began to sell orders to clear their positions, while others planned to take orders at low levels. More people hoped that the speeches of important figures could help the stock market avoid disaster.

Because the dark clouds hanging over Wall Street are clearly visible. When the prosperity of the stock market is about to come to an abrupt end, two events have put a heavy end to the curtain call of this prosperity, and also put a damper on the four-year depression. Two salutes were fired.

On September 20, 1929, the Clarence Hatry Company in England suddenly collapsed. Hartley is an interesting, un-English character. The English often lamented that he was a man of his caliber, although his earlier years in finance were reassuring. Hartley built an industrial and financial empire in the 1920s that was truly impressive in scope. The empire's most visible core business was the manufacture and sale of coin-operated automatic cameras. Later, Hartley gave up these humble enterprises and switched to investment trusts and block financing business. He made his fortune in large part through unlicensed stock issuances and accumulated assets through illegal stock issuances and other equally irregular financing operations. According to legend in 1929, the revelation of Hartley's truth in London was thought to have seriously affected confidence in New York.

Another incident that circulated at the same time as the Hartley incident was that on October 11, the Massachusetts Public Utilities Board did not allow Boston Edison to split its shares into 4 shares. As the company noted, stock splits were very popular at the time. For Boston Edison, failure to make progress risks regressing to the gaslight era of the company. No stock split is allowed, which is also unprecedented. The Massachusetts Department of Public Utilities immediately responded by announcing an investigation into the company's credit rating, noting that the current value of the company's stock "had been achieved as a result of speculation" and had now reached a point where "in our judgment, none People will feel that buying this stock is still profitable based on its income."

These are some irresponsible words. It is conceivable that these words could have had consequences as serious as the revelation of the truth about Clarence Hartley. However, it is equally possible for an already unstable equilibrium to be upset simply by a spontaneous decision to exit the market. On September 22, the financial pages of various newspapers in New York published an investment service advertisement in eye-catching bold letters: "Please don't stay too long, the bull market opportunity will not reappear." This advertisement can be understood as: "Most investors who make money in the bull market will eventually have all their profits wiped out by the subsequent stock market adjustment, and some will even suffer net losses." A drop in the Federal Reserve's industrial index, the exposure of the Hartley truth, or the perverse difficulties of the Massachusetts Department of Public Utilities were unlikely to inspire tens, then hundreds, and finally tens of thousands of people. Ideological concerns that the bull market is coming to an end. We don't know what prompted investors' concerns in the first place. However, we understand that it doesn't matter what causes investors' concerns.

These two incidents occupied the front page of the news and caused an uproar, because their exposure reminded people that the stock price may indeed be in a bubble, giving people who were sleeping a resounding slap in the face, but the stock price did not plummet in response. Wall Street elites Join Mitchell (Charles Mitchell, president of National Bank of Commerce) in declaring that the stock market is healthy and the upward trend is unstoppable, and so on. The only disturbing thing is that the stock price has been falling.