The stock market crash - and after

Bibliographic data

Monograph

Identifikator:: 1815583320

URN:: urn:nbn:de:zbw-retromon-204544

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The stock market crash - and after

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1930

Scope:: XXVI, 286 S.; graph. Darst

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter III. Causes of the Panic

Collection:: Economics Books

Causes of the Panic 55 through the bear raiding, it produced a vicious circle in which people were selling who wanted to buy. The “short selling” continued to hit the investor when he was down, until prices came to represent, not a lessened estimate of earnings at all, but an increased fear of individual insolvency. As this point was reached, the banks and brokers were protected by the action of the stock market on November 13th, in heading off possible bear raids by requiring all Stock Exchange members to report daily their “short” sales. Then the short selling stopped abruptly, prices rose and liquidation pro- ceeded in an orderly manner. This caused those buyers who had been awaiting their chance to recognize that the market had at last “touched bottom.” They jumped in and bought, thus causing prices once more to register, to some extent, the public’s estimate of future pros- bects of business. But this body of investors that took over the distress sales at the bottom consti- tutes a new public, not the old enthusiasts. These had in large measure been closed out. This new investing public lacks not only the old enthusiasm but also the old knowledge, although they are better controlled. They will be much more cautious than the holders who bid up the stock price level and will buy less on borrowed money. The resultant contraction of demand in the stock market may prevent prices for a long time from regaining their old height on the new plateau.

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