A quite amusing sample of the similarities between the Great Depression and now.
Great Depression:
“We will not have any more crashes in our time.” – John Maynard Keynes, 1927
“There will be no interruption of our permanent prosperity.” – Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
“There is no cause to worry. The high tide of prosperity will continue.” – Andrew W. Mellon, Secretary of the Treasury, September 1929
“Stock prices have reached what looks like a permanently high plateau.” – Irving Fisher, Ph.D. in economics, Oct. 17, 1929
“Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board.” – New York Times, October 14, 1929
“This crash is not going to have much effect on business.” – Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
“…despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression…” – Harvard Economic Society (HES), November 2, 1929
Today:
“Home sales are coming down from the mountain peak, but they will level out at a high plateau — a plateau that is higher than previous peaks in the housing cycle.” – David Lereah, Chief Economist, National Association of Realtors, Dec 2005
“We may see a blip up in foreclosures and delinquencies.” – Leslie Appleton-Young, Chief Economist, California Association of Realtors, Dec 15 2005
“The U.S. housing market appears to be emerging from its recent travails and the worst may well be over”,Federal Reserve Chairman Alan Greenspan, Reuters release Oct 9, 2006
“The subprime mess is grave but largely contained” – Federal Reserve Chairman, Ben Bernanke May 17 2007, Speech before the Federal Reserve Bank of Chicago
“This is far and away the strongest global economy I’ve seen in my business lifetime.”- Henry Paulson, US Treasury Secretary, July 12th, 2007
“The market impact of the U.S. subprime mortgage fallout is largely contained and the global economy is as strong as it has been in decades.” – Henry Paulson, August 2007
“This is not a rescue” – Goldman Sachs Chief Financial Officer David Viniar after Goldman poured $3 billion into one of its hedge funds, Aug 13, 2007 more
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