The stock market crash - and after

Bibliographic data

Monograph

Identifikator:: 875232663

URN:: urn:nbn:de:zbw-retromon-2698

Document type:: Monograph

Title:: The law of friendly societies, and industrial and provident societies, with the acts, observations thereon, forms of rules etc., reports of leading cases at length, and a copious index

Place of publication:: with the acts, observations thereon, forms of rules etc., reports of leading cases at length, and a copious index$gTenth edition, revised and enlarged

Publisher:: Shaw and Sons

Year of publication:: 1881

Scope:: 1 Online-Ressource (XII, 303 Seiten)

Digitisation:: 2017

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

54 The Stock Market Crash—dAnd After that actually the short interest in the market was very small at a time when inevitably it would have been extensive had considerable short selling occurred earlier. This, in fact, was one great reason for the ‘air pockets’ in the market. One must always remember that a short seller, when he sells, is forced to become a compulsory buyer of stocks. In panics, frequently the short interest provides the only effec- tive demand for shares, since margin purchasers are frightened or financially crippled, while investors wait for the bottom of the decline before invest ing. In 1914, when war broke out, the New York stock market was fortunate in possessing a very large short interest, and this fact accounts for the remarkable resistance shown by the stock market prices before the Exchange was compelled to close. In 1929, the situation was very different. For years bear traders had been very severely punished, and there had been little short selling in the market and practically no short interest. If we had had more short selling during the summer, it would have of course restrained the undue rise in share prices at that time, and would have provided bids in the market during October and November. The reason for the organization of the so-called ‘bankers’ pool’ arose from just this fact of an inadequate short interest in the market. Of course the Stock Exchange questionnaire was not aimed to halt short selling, although this perhaps was its psychological effect.” But as the panic proceeded, in part, at least,

Access restriction

Copyright

Full text: The stock market crash - and after

Monograph

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation