xvi 
Introduction 
prices.” But I did not at that time believe that there 
would be anything in the nature of a serious crash. 
I had said, in an article published in many news- 
papers, May 12, 1929, that the so-called “Hoover 
boom” in the stock market had about reached its 
climax. The “Hoover market” had risen above the 
forecast line, calculated by the Karsten Statistical 
Laboratories in New Haven, by from 12 to 25 per 
cent from the time of Mr. Hoover's election to his 
taking of the oath of office on March 4th, after 
which, up to the close of April, it receded to 18 per 
cent above the line. In this article I remarked that 
all previous departures from the Karsten so-called 
“line of fundamentals” had returned within a short 
period to this forecast line, and added: 
“The ‘Hoover Market’ can hardly go much fur- 
ther above the forecast line. It may fall below, but 
in that case it will fall to a higher level than the 
peaks of the previous booms.” 
This opinion was fulfilled. As the Karsten chart 
shows (with the white zone bounding the recorded 
average of the market each month) the continuous 
forecast line, based on previous records of various 
items of business conditions, represents with fair 
accuracy the long swings of the market. The depar- 
tures from the line, up or down, represent the “psy- 
chological” short swings, as shown on the accom- 
panying chart. These characterized the collapse of 
the stock market at the onset of the war in 1914; 
the war boom of 1915-1916; the marked depression 
of 1917, during the period of Federal financing