Oct. 25:
[Note: Federal Reserve funds used for speculation – that's crazy talk!] Glass Senate subcommittee to meet about Nov. 15 to investigate financial matters, particularly use of Federal Reserve funds to help finance speculative operations.
[Note: Tell-tale sign? dept.] London insurers raise rates to insure property in US against civil disturbances.
[Note: I love the smell of metaphor in the morning.] Amer. Iron and Steel Institute meets at the Commodore Hotel; prominent steel executives speak, including C. Schwab, E. Grace, etc. Price cutting seen as main problem facing the industry; over-expansion also cited. Industry praised for maintaining salaries and staff as far as possible. Long-term optimism expressed; C. Schwab calls for looking beyond “immediate but transient gloom,” says business in general has weathered the recession in a most assuring way. “Apply the heat treatment of an intelligent glowing optimism to the current warped point of view and most of the stresses and strains will disappear.”
[Note: Ay Chihuahua! Dept.] J. Raskob, GM finance committee dir. and Democratic Nat'l. Committee Chair., optimistic on auto industry: “There have been indications during the past six to eight weeks showing that the depressed conditions in the automobile industry have reached bottom and are slowly turning into more normal channels. ... Sharp revival in the motor industry may be expected to begin with the automobile shows in early January. It will stimulate all other lines of business activity. ... There can be no doubt that the motor industry will show substantial improvement in 1931. ... Optimism should now be the order of the day.”
[Note: Ay Chihuahua! Dept.] Recent increase in bank loans on securities to non-brokers seen as indicating buying by stronger and more experienced investors.
[Note: Never trust a guy with two first names dept.] Federal investigation started into Charles V. Bob, promoter of a long string of mining stocks who recently went missing; two of his firms put into receivership.
Oct. 24:
[Note: Fundamentals, earnings, and dividends – that's crazy talk!] Several brokers report clients buying stocks for cash are now paying careful attention to fundamentals such as position of the company in its industry, prospects of the industry, management, earnings, and dividends. This contrasts with “fancies which appeared to rule when stocks were being carried to abnormally high levels.”
[Note: Ay Chihuahua! Dept.] Broad Street Gossip: “If history repeats itself, you can expect to see the following ... Oct. 24, 1930: 'If I had only sold out in Sept. 1930! Just see where they are now.' Oct. 22, 1931: ' If I had only bought some stocks in Oct. 1930! Look where they are now.'”
Oct. 23:
[Note: Strangely familiar dept.] A. Reynolds, Continental Ill. Bank & Trust Chair., sees “signs in a good many different directions that business is picking up somewhat”; gains are uneven, not general; “improvement ... will probably come in this spotted way and gradually work into a more general betterment,” probably starting with small businesses and moving to large. Commodity prices relatively stable since July, seem to have bottomed.
[Note: Interesting.] W. Edge, US Ambassador, says France “like an oasis surrounded by depression on all sides,” with unemployment practically nil; acknowledges differences with US on tariff, but “is this not always the case when two nations maintaining high protection barriers try to agree?”; says gold accumulation by France an internal matter.
[Note: Sheer Genius dept.] “New type airplane, claimed to be safest yet constructed, tested in Berlin. Plane resembles duck in appearance and seems to be flying backwards when in motion.”
Oct. 22:
[Note: Sheer Geometric Logic dept.] Editorial: Senator Glass apparently means to start another “money trust” investigation like the one in 1913 [investigating control of bankers and the NYSE over the economy; followed by Federal Reserve Act and 16th Amendment]. The NYSE can be expected to mount a better defense this time. One item requires clarification: the subject of “gambling in stocks” is likely to come up now as it did in 1913, but it was never defined. The main distinction is in the person, not the act: if reasonable judgement is used, then it's not gambling. Therefore, since reasonable judgement is always possible when trading stocks, the act per se is not gambling; Q.E.D.
[Note: Danger of using historical precedents dept.] Hayden, Stone & Co. point out that in the 33 year history of the Dow Jones average there have been 5 major bear markets, with 4 severe enough to be called panics; in none of these cases did the market break substantially below the panic low in the following year. This is no guarantee, but there's a logical reason for it: in the throes of panic, prices tend to be driven lower then they'll be when investors are calmer and more rational.
[Note: Strangely familiar dept.] Many of the Q3 earnings reports so far have been “fair reading,” especially in light of the pessimism going into earnings season.
[Note: Always keep your eye on the freight loadings dept.] Rail freight loadings for week ended Oct. 11 were 954,874 cars, down 17,618 from prev. week and down 224,666 or 19% from 1929 week.
[Note: Sheer Genius dept.] “Buy-a-bale” movement proposed by Texas Gov. Moody to remove 5M bales of cotton from the market draws many responses. A couple of the more interesting ones: One Arkansas enthusiast proposed “burn a bale” movement, himself buying a bale and setting fire to it on a main street; movement ran out of steam when he was summarily thrown in jail for arson. W. Parker, economist for Fenner & Beane, has started using cotton cloth for everything possible, including writing paper.
[Note: Attention Jay Leno - feel free to use this joke - you can make it about the Smart car.] Eddie Cantor joke about midget cars: “A chap riding in one said to the driver, 'It's dark; we must be going through a tunnel.' 'Tunnel hell,' replied the other, 'we're under a truck.'”
Oct. 21.
[Note: Strangely familiar dept.] NY City businessmen's committee to relieve unemployment will make special appeal to Wall Street, since many currently unemployed were laid off from there.
[Note: Danger of contrarianism dept.] Broad Street Gossip: “The other extreme from last year's peak prices has been reached ... many stocks ... in October, last year, may have been entirely too high. Many stocks are now entirely too low. Some are selling ex-bad earnings, ex- ... passed dividends, and everything else.”
[Note: Sheer Genius dept.] New German railroad car driven by 400 hp airplane engine attains speed over 100 mph.
[Note: Things got ugly when flight attendants ran out of liquor at 5 days, 7 hours.] New record for flight between England and Australia set by C. Kingsford-Smith - time of 9 days, 23 1/2 hours beats old record by 5 days, 2 1/2 hours.
[Note: Whatever happened to those suitcase labels?] “'Has Harry traveled much?' 'Has he! He's been to half the places on his suitcase labels.'”
Oct. 20:
[Note: Danger of contrarianism dept.] Experienced market observers see the current universal bearishness as very favorable; market psychology is exactly the opposite from that a year ago when bullish enthusiasm obscured unmistakable signs of a rapid decline in business. Many who were observant enough to sell in the final stages of the bull market are now taking advantage of deflated values and good yields to replace their holdings.
[Note: I can't believe that didn't happen dept.] R. Updegraff, writing in the current issue of Tomorrow's Business, sees bright future for gas stations: “May it not be that new villages and towns and, ultimately, cities, will grow up around some of the best located of our roadside filling stations?”
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