The Weekly Blather Dec. 7, 1930

Disclaimer: None of what follows is to be taken as financial advice. Do your own due diligence on all investment decisions! Also, the observations here aren't particularly original at this point, but maybe I can add an angle or two ...

No Journal was published Sunday, Dec. 7, 1930. Since I'm now doing the snarky commentary day by day, I'm going to try some more free format commentary. First, my personal favorite item of the week, from Dec. 6:

Alaska's vast distances can be appreciated by overlaying it on the continental US. If it were placed with the Northern tip touching the US-Canada border west of Lake of the Woods (about halfway across the US), part would reach the East Coast between Georgia and S. Carolina, while another part would cross over Southwest New Mexico into Mexico, and the Westernmost part would enter the Pacific in Southern Calif.

I'm too lazy to verify if that one is true, but it sure is cool. Second, my most interesting items of the week, from Dec. 6, 3, and 2:

Comprehensive total of all loans on securities is available once a quarter; peak was $16.974B on Oct. 4, 1929; this declined to $11.521B on Sept. 24, 1930, and is estimated at $10.5B now. This includes loans by banks to non-brokers and loans to brokers by non-banks. Total bank loans on securities are currently $7.761B, which is actually higher than on Aug. 30, 1929 when the market was close to its peak.

“Due to the lack of demand from brokers and business, banks have been forced to seek employment for their funds in investments.” Many have criticized this heavy buying of investment securities by banks in the past year as risky. Bank defenders point out there's been a large increase in deposits too, so the ratio of investments to deposits is still relatively small.

Fed. Reserve member banks weekly report for Nov. 26: loans on securities down $77M to $7.761B, “all other” loans down $86M to $8.766B. Investments held by banks are up $400M in the past 8 weeks and $1.4B since start of Oct. 1929.

which will provide the basis for some serious blathering. The interesting thing here is the fact that banks remained so exposed to the markets, even after the extensive liquidation that observers thought had taken place at the time. The answer to the following question would no doubt take deep study, but I'll ask it anyway. Note that the bear market at this point is still a fairly run of the mill one, down a bit over 50% from the peak and only down about 35% from where it was in mid-1929, before the final blowout rise from 300 to 380 that summer. Is it coincidental that the bear market doesn't become a true outlier until the big banks start blowing up around this time?

And, to make a feeble attempt at modern-day relevance, might it be possible that the big banks today, being unwilling or unable to find outlets in lending (as credit has again been shrinking as it did then), remain a touch too exposed to the markets? You would certainly hope that the banks, after their death-and-artificial-resuscitation experience last year, would be cutting back seriously on risk. But is this in fact happening, or is a horde of manic traders at banks and the hedge funds they lend to taking one more desperate shot at, in the words of manic trader par excellence James J. Cramer's latest book title, Getting Back to Even?

Unfortunately, it would probably be difficult to answer this question by studying bank financial statements; there are so many innovative ways banks can keep stuff off the balance sheet these days, not to mention the still almost completely uncontrolled and uncounted ability to take on market exposure using derivatives. Might there be some other signs we can look for? Well, one subtle one might be the ginormous trading profits reported by almost every big bank in Q3. But how about a more holistic approach?

Lets look at market movements over the past few months. Stocks - up; Low-quality stocks - up even more; Bonds - up; Low-quality bonds - up even more (amazingly, spreads between corporate bonds and treasuries are back to mid-2007 levels); Commodities - up; Dollar - down; Gold - up; Implied volatility - down (this is a number that correlates with the cost of buying options on stock movements, i.e. buying insurance against stocks going up or down - so this insurance has been getting cheaper).

Now, maybe there's a single rational belief about the economic future that all these market movements, taken together, are expressing. However, all the attempts I've seen are like Silvio Berlucsoni trying to wear a Speedo - no matter how you try to make everything fit, a couple of awkward bits wind up poking out and ruining the picture.

However, what if we switch the question from: “What coherent opinion about the economy are all these different markets expressing?” to: “Given that a large number of traders at banks and the hedge funds they loan to have are trying to get even, what trades with momentum would they pile into?”

Suddenly, a whole bunch of trends start to fit. Stocks? Check. Especially low-quality high-beta tradeable stocks? Check. Bonds? Check. Especially low-quality marked-down bonds that you'd make a killing on if they bounced back? Check. Commodities? Check. Gold? Check. Non-dollar currencies? Check (anti-dollar carry trade). Implied volatility down? Check (as Lowenstein noted in When Genius Failed, there is a class of quantitative traders who seem inexorably drawn to selling volatility).

If this hypothesis is true, a couple of practical consequences follow. First, it suggests that when things do go into reverse, almost everything goes down at once; gold, commodities, non-dollar currencies, bonds, stocks etc. - nothing is a shelter from the storm and the only thing you want to be long is panic. Of course, this result in itself clearly makes the hypothesis impossible as it's ridiculous for all these anti-correlated things to all go down at once; in fact, that would clearly be a thousand-year flood, since it hasn't happened for around a year.

Second, it's probably futile to try and figure out when things go into reverse based on economic predictions, since it depends more on when some significant part of the common liquidity pool feeding everything springs a leak. In fact, I wouldn't be surprised if the rallies continue on bad economic news and reverse when the economic news is looking better. The turn may come when some central banks decide to act, but I think the more likely possibility is that it's triggered by some fairly small looking default ... that causes a scramble to get out of linked assets or derivatives ... that causes a margin call or two ... and we're off to the races again.

Saturday, December 6, 1930: Dow 181.11 +0.12 (0.1%)

Assorted historical stuff:

Washington report: Projected $180M deficit not considered alarming, may even be beneficial in restraining Congressional spending. Proposed cotton investigation and Muscle Shoals legislation continue as longtime regular features of Congressional sessions. Project to combine Army and Navy air services likely to be opposed by both branches of the military. Anti-Prohibitionists to keep agitating to lay groundwork for next session.

[Strangely unfamiliar dept.] Treasury Under-Sec. Mills defends national debt reduction program of past decade as benefitting current generation; notes interest on nat'l. debt declined from $1.024B in FY 1921 to $603M in FY 1931.

M. Woll, AFL VP, presented Labor's solution for unemployment. Purchasing power of the masses should be increased in proportion to savings provided by automation and improved organization; may be done through higher wages, shorter hours, or lower prices. “Industry ... may work it out within itself”; however, if industry remains paralyzed by current conditions, “then the masses in their desperation may be expected to turn to a Congress made responsive by the ballots of enraged people, demanding abdication of private interests in favor of the state.”

[It's a shame we don't get these deep philosophical discussions on newspaper front pages anymore. New York Post excepted, of course.] Editorial by T. Woodlock: In his 1918 book “The Downfall of the Western World,” Spengler suggests our civilization may be near its end, with a new “Kultur” to arise; some see Soviet Russia as a likely candidate. Soviet challenge to the West has two aspects, economic and “ethical.” Strength of the economic challenge is uncertain; “nothing in human experience to date warrants the belief that a 'collectivist' form ... is likely to prove the most efficient competitor in business and industry.” A more interesting question may be whether the Soviet philosophy succeeds - one that is “amoral,” materialistic, determinist, and completely dismissive of religion. It's interesting that this determinism is more in tune with 19th century science, whereas modern science embraces nondeterminism and possibly even free will.

German Pres. Von Hindenburg issues decree making Breuning financial reforms effective. Financial authorities approve; balanced budget seen assured despite high unemployment. Berlin stocks maintain better tone; Germany joins France in drawing gold from England.

Editorial: Farm mortgage burden is too heavy. Total mortgages are about $9.5B, up from $7.9B in 1920. This is only about 22% of the total value of all farms, but current low earning power makes 6% mortgage interest take about half of net income. Farmers unwisely went deeper into debt during a period of rising prices. It's essential they get out from under this load; if they ever do, it will be by more efficient production.

Calif. Supreme Court decides unreasonable waste of oil and gas resources may be prohibited, though application of the law is expected to be complex.

New smaller US currency bills expected to save $2M annually, $400,000 in paper alone.

Telephones were first installed at the White House in 1879, at the end of Rutherford B. Hayes' term. Records show Hayes rarely used the phone, then regarded as a “new toy.” Hoover is the first President to have a telephone at the desk in his executive office.

Pan American starts bi-weekly air service between Miami and Panama via Jamaica and Cuba; route involves longest regularly scheduled water “hop” of about 700 miles between Kingston and Cristobal. Pan-American is also operating an 8,000 mile airmail route between New York and Rio de Janeiro.

[This is pretty cool.] Alaska's vast distances can be appreciated by overlaying it on the continental US. If it were placed with the Northern tip touching the US-Canada border west of Lake of the Woods (about halfway across the US), part would reach the East Coast between Georgia and S. Carolina, while another part would cross over Southwest New Mexico into Mexico, and the Westernmost part would enter the Pacific in Southern Calif.

Experts predict a “supergas” system is possible linking all US gas mains for long-distance transportation of natural gas.

Cuban newspaper El Siboney reports Professor G. Claude, French scientist, will construct $4M thermodynamic plant at Santiago capable of generating 25MW of electric power from the sea.

NY Emergency Employment Committee has put over 15,000 unemployed heads of families to work, of whom over 1,000 were women with dependents. Due to unexpected demand for jobs, goal for the committee has been raised from $6M to $8M.

Market commentary:

Market wrap: Stocks weak in morning, particularly rails, but rallied in late afternoon; uptrend strengthened in final dealings. Bond market more active; US govts. slightly lower; foreign mostly steady; corp. highly irregular with many new lows. Commodities somewhat weaker.

[Ay Chihuahua! dept.] E. Herr, Westinghouse VP, points to strong position of financial institutions, large gold supply, low inventories, and efficient credit and transportation; “no one can doubt that the present depression in business will soon be over and that still greater progress is before us.” Attributes 1920's prosperity to war's destruction in Europe; depression is due to readjustment to their recovery. Calls for govt. and business to speed up planned work in periods of unemployment; while depressions occur regularly, they're becoming less severe and shorter over time.

Market seen likely to remain largely under professional control and trade in a narrow range until “some incentive develops for more aggressive operations.”

Short interest reportedly smaller due to recent covering; borrowing demand for stocks has been lower.

Brokers continue to report little new outside buying, though there has been considerable switching between stocks.

Recent efforts to stabilize various commodities considered encouraging development in the long term.

Farm Board annual report says stabilization hasn't worked as hoped in spite of extensive efforts, opposed to further operations except in emergencies. Sees main future solution in production control and cooperative marketing organizations.

Outlook for coffee growers considered poor due to free-trade policy of Brazil Pres. Vargas; current world consumption is less than 25M bags annually, while Brazil currently has 27.2M surplus bags due to previous withholding policy, and forthcoming worldwide crop is estimated at 32M bags.

Traders discounted relatively good car production figures in Nov., attributing them to early production of new models; further production decline seen in Dec.

Edsel Ford says promiscuous price-cutting on well-established articles is dangerous, but retail prices as a whole must adjust themselves to recover from depression.

F. Carlisle, Niagara Hudson Power chair., points out gas and electric cos. will spend over $1B for expansion in 1931, and pay $400M annually in taxes; this revenue would be lost under public ownership.

Economic news and individual company reports:

[Interesting information - another indication there's still quite a bit of leverage in security positions.] Comprehensive total of all loans on securities is available once a quarter; peak was $16.974B on Oct. 4, 1929; this declined to $11.521B on Sept. 24, 1930, and is estimated at $10.5B now. This includes loans by banks to non-brokers and loans to brokers by non-banks. Total bank loans on securities are currently $7.761B, which is actually higher than on Aug. 30, 1929 when the market was close to its peak.

Security loans by NY City banks to non-broker customers (considered “strong hands”), after rising since mid-Sept., have declined slightly in the past 2 weeks.

Currency in circulation has increased $189M since Oct. 29; this is partly a normal seasonal move though this year it may also be due to the recent bank failures, which in many cases were preceded by heavy withdrawals. Fed. Reserve has been buying bankers acceptances and govt. bonds to keep money rates low.

Bradstreet's and Dun's weekly reports note moderate improvement in retail trade, stimulated by colder weather, approaching holidays, and “sales”; however, industrial activity is slower and retail remains below previous years, especially in Midwestern and Southern areas affected by bank failures.

New bond offerings in Nov. were $203.0M vs. $416.6M in Oct. and $105.2M in Nov. 1929; first 11 months were $5.045B vs. $2.957B.

Rail report: Class 1 rail employees in mid-Sept. were 1.486M, down 1.8% from Aug. and 14.9% from 1929; total pay was $208.7M, down 3.2% and 15.8%. Total freight car loadings for 1930 estimated at 45.7M cars; would be below 50 million for first time since 1924 and lowest total since 1922. ICC agrees to postponement of lower Western grain rates to April 1, but probably not beyond.

Engineering News-Record reports Nov. construction and engineering contracts were $189.3M vs. $242.9M in 5 weeks of Oct. and $237.7M in 4 weeks of Nov. 1929.

Cleveland employment index Nov. 30 was 87.4%, down 4.6% in Nov., and vs. 108.8% in 1929. Detroit industrial employment index Nov. 30 was 75.8% vs. 79% Oct. 30 and 93% in 1929.

Sales of radios reported lower than expected; Radio Corp. has cut production severely, and leading stores have already announced discount sales.

Egg and butter prices continue to drop, with December egg futures dropping to the lowest level in 50 years.

Company reports since Oct. 1: 245 companies reported higher earnings vs. 1929 and 409 lower; 695 dividends unchanged, 67 increased, 108 cut.

Companies reporting decent earnings: General Mills, Adolf Gobel, Inc. (sausages, deli products).

Joke:

“First Salesman - Any business? Second Salesman - Well, yes. The wife gave me some orders this morning.”

Friday, December 5, 1930: Dow 180.99 -3.12 (1.7%)

Assorted historical stuff:

[Strangely unfamiliar dept.] Editorial: Some are suggesting raiding the “sinking fund” (used to reduce the national debt by about $440M annually) to close the deficit this year and continue the 1% income tax reduction. “But every consideration of sound finance,” in both short and long term, is powerfully against “such mere convenience. ... Public sinking funds, once raided for the convenience of statesmen, are almost impossible to restore.”

[Interesting how estimates of the number of unemployed are all over the place.] W. Green, AFL pres., estimates unemployed, not including farm and office workers, now number 4.860M vs. 4.500M at end of Oct.

[For the sake of uncounted future investors, stop before it's too late!] Postmaster Gen. Brown grilled by Congress on airmail spending, pleads for continuation of subsidies for airlines for two years to help develop the passenger air industry. Also proposes starting a “de luxe” overnight air mail service between NY and Washington for 25 cents an ounce.

[Banks ... good will ... does not compute ... ] G. McGarrah, Bank for Int'l Settlements pres., asks US banks to make careful study of loans abroad to avoid loss of good will by sudden withdrawals of money.

French Premier Tardieu resigns after govt. loses 147-139 vote following heated debate in Senate; entire Left Wing of Senate united in bitter attack on Cabinet.

Editorial: Sugar conference will at best be a stopgap to prevent producer bankruptcies. Long-term problem is tariff barriers and subsidies creating increased production by less efficient producers including Puerto Rico and Philippines, and leading to “an economic death grip on Cuba.”

Wild horses have become such a nuisance in parts of Oregon, Montana, and Colorado, that authorities are considering bombing the big herds from airplanes. The herds are suspected of spreading diseases to domestic horses. Slow demand for horses has all but stopped catching of the wild ones.

[Birth of a legend dept.] General Foods introduced new lime flavor of Jell-O nationally in past year, to great success. Also doing well is Minute Tapioca.

A Parisian seller of radio equipment was so irritated by the recent disappearance of his wife, an employee, and $5,000 of his money, that he broadcast the story on the radio, along with a threat of legal action. The guilty couple heard the message and returned panic-stricken to Paris; the employee has been sentenced to 3 months imprisonment and ordered to pay the husband damages of one franc.

Eddie Cantor's financial advisor says he was just joking in his widely quoted remarks about getting cleaned out in the market crash.

Market commentary:

Market wrap: Stocks continued lower on sluggish trading; merchandising and utility shares weak. Bond market dull; US and foreign govts. generally steady; corp. generally weak with many sharp declines and new yearly lows. Commodities firm.

Market observers “somewhat less confident,” though they continue to advise accumulating on reactions, and to advise against going short.

Weakness in bond market in recent weeks has been disappointing. “One authority” believes it may be due to problems of “some of the smaller banks” around the country, “although it is well known that banking conditions generally are unusually strong.” [To repeat: the first major banking crisis of the Depression is in the process of erupting.]

[Why don't they use these cool words on CNBC? ] Observers encouraged by continued market dullness, indicating “recrudescence of the heavy selling accompanying the Sept.-Nov. break was not likely”; believe “necessitous liquidation” largely complete, strong foundation under the market in buying from banks, insurance cos., investment trusts, and individuals. Period of dullness considered similar to windup of previous bear market in 1921.

Yields of 5% on “seasoned stocks” such as AT&T and US Steel, together with year-end reinvestment demand considered favorable for market.

Many less-active Curb Exchange [later Amex; small cos.] stocks now have huge bid-ask spreads; for example, Franklin Mfg. Pfd. was 28 1/4 bid, 50 ask.

Prospects for steel price increase seen better than for other commodities; there's no large surplus to work off, and independent producers are cooperating.

Price stability seen as important in all lines of industry; price uncertainty causes hesitation in placing orders; “experience indicates that price concessions, instead of increasing buying by attracting consumers, actually cause orders to be withheld.”

H. de La Chapelle of E.F. Hutton reports on study of market movements since 1884; finds market cycles average 3 1/4 years both peak-to-peak and bottom-to-bottom over that time, giving roughly 3 complete market cycles every major 10-year cycle.

M. Wolff of Hammerschlag, Borg notes striking reversal in investment trust fashions; managed trusts (similar to actively managed mutual funds), after selling at large premiums when issued, are now selling at 20%-50% discounts from liquidation value; meanwhile fixed trusts (similar to ETF's) are now at 7%-12% premiums.

Economic news and individual company reports:

Customs receipts in fiscal year 1931 estimated at $500M vs. $587M in 1930, but recovery to $625M expected in 1932. Receipts surged 113% in the 10 days following passage of the tariff, then slumped to a maximum decline of 54%, then gradually recovered until the decline for Nov. 5-14 was only 15% vs. 1929.

Rail report: ICC recommends abolishing recapture of “excessive” profits from previous years; notes economic difficulties of rails but says “country still needs its railways and can support them”; recommends regulation of rail holding cos. Treasury Sec. Mellon urges reduction of interest rate on some rail obligations to US. Operating income for class 1 rails in first 10 months estimated at $772M vs. $1.116B in 1929 and $986.2M in 1928; Southwest and West rails had best showings.

Steel report: More steel cos. join price advance. Sen. Norris (R., Neb.) and Sen Walsh (D., Mass) denounce rise as possible price fixing, call for investigation. Dow average of eight finished iron and steel products remained at $44.42/ton, low for 1930. Scrap markets continued dull, prices weaker.

Stock market history: Short selling has been prohibited in the past, including in Britain in 1733 and New York in 1812. These prohibitions have generally been defied and eventually whittled away and repealed.

Total corp. bonds in default Nov. 1 were $621.9M vs. $458.5M on Nov. 1, 1929 and record high of $758.6M in 1920. Most common type in default was real estate corp. Industrial bonds in default Nov. 1 were $241.0M.

Nov. car production in US and Canada was 146,185 vs. 154,585 in Oct. and 226,997 in Nov. 1929; decline was less than usual seasonal pattern. Ford output declined about 26,000. US passenger car registrations in first 10 months were 2.437M vs. 3.559M in 1929. Ford registrations were 992,370 vs. 1.189M.

Electric output by US light and power industry for week ended Nov. 29 was 1,680 GWHr vs. 1,722 in prev. week and down 3.8% from 1929.

Fed. Reserve reports money in circulation Dec. 3 up $50M to $4.615B, total Reserve Bank credit outstanding up $80M to $1.108B. Member banks in NY City report brokers' loans down $11M to $2.111B vs. $3.392B in 1929; loans on securities to non-brokers down $9M to $2.045B .

Britain continues to suffer heavy gold drain to France. Need seen for remedy to stop French influx. Bank of France reportedly buying sterling to attempt support.

Nov. merchandising sales were disappointing, generally falling well below 1929 figures, though some of the decline was due to Nov. 1929 having an extra business day. Woolworth Nov. sales were $24.1M, down 7.9%; S.S. Kresge $12.5M, down 10.8%; Montgomery Ward $22.4M, down 24.9%.

Companies reporting decent earnings: General Foods, National Power & Light.

Joke:

“She - I don't want to go riding with you. Your car is an old one. He - Say, listen, lady; you're no 1930 model yourself.”

Thursday, December 4, 1930: Dow 184.12 -2.71 (1.5%)

Assorted historical stuff:

[Strangely unfamiliar dept.] Pres. Hoover defends ending the 1% tax reduction, since it would cause another budget deficit in 1932: “I am confident that the sentiment of the people is in favor of a balanced budget. ... When we stop to consider that we are progressively amortizing our public debt, and that a balanced budget is being presented for 1932, even after drastic writing down of expected revenue, I believe it will be agreed that our government finances are in a sound condition.”

Congress seen acting quickly on Pres. Hoover's proposed measures for unemployment and drought relief; may also tackle immigration restriction and capital gains tax modification. Other major proposals will have to wait at least until the next session.

Senate seats James Davis, newly elected Republican of Penn., in spite of dispute over campaign spending; Senate as a whole apparently “no longer enamored with the idea of blackballing successful aspirants whose ... election may have entailed large expenditure unless there is a clear case of wrong doing.”

[This actually sounds like a pretty good idea.] Editorial by T. Woodlock with proposal from Public Utilities Fortnightly for utility rate regulation: utilities would be allowed to keep any profits made each year, but rates would be adjusted each year based on profits the previous year, to move closer to a “fair return” on investment. This would give incentive for lower costs over time; Potomac Electric Power Co. has been regulated this way since 1924, and rates have gone down from 7.5 cents/KWhr to 4.7 cents in that time.

Reichstag holds first session “amid intense excitement” and strong police guard. Communists protest police presence and shout “starvation minister” when Finance Min. Dietrich starts speaking. Little accomplished. Extremist parties may test strength in motion to set aside Breuning austerity program, but financial circles are optimistic; Berlin stocks were up.

Editorial: Disarmament Commission of the League of Nations has been a failure. The Versailles treaty promised that all the parties would reduce armaments; “Germany, disarmed, does not share the complacent indifference to these promises of her armed neighbors and the US. ... Twelve years after the peace was made and nearly eleven years after the League was born, disarmament has got no further than preliminaries to a conference about it.”

Mexican Congress gives Pres. Rubio extraordinary financial powers to deal with crisis.

H. Deterding, managing dir. of Royal-Dutch Shell [AKA the Napoleon of oil] responds to Moscow engineer's trial naming him as “criminal”; says trials intended to cloak imminent failure of Five Year Plan, shift blame from dictators in Kremlin; claims Soviet would fall in 3 weeks if deprived of credit and world markets.

Belgian businessmen suggest Belgium and Holland join economic and customs union being formed by Norway, Sweden, and Denmark.

Editorial: Decline in farm prices hurts the 22% of the population involved in farming, but helps the buying power of the rest of the population. While it wouldn't be good for the current low prices to be permanent, they should help start a recovery that benefits all, including farmers.

Copper industry believes antitrust laws should be modified to allow companies to cooperate in controlling production; cite bad consequences of drastic fluctuations in price, including more wasteful production, pressure on wages, and difficulties of users in guessing when to buy.

[Sheer Genius dept.] Pilots have been providing an unofficial lifesaving service - on clear nights, they can see fires from far away. “If the fire is unnoticed by persons on the ground, the pilot simply opens his engine wide” and dives at the burning building, “pulling up into a climb when he has come as close to the ground as possible with any degree of safety. He repeats this until the roar of his engine has aroused the neighborhood.”

United Aircraft begins first direct New York - Chicago air service, completing transcontinental New York - San Francisco route. To use new Ford tri-motor planes with 135 mph cruising speed. First plane carried 5 passengers and 500 pounds of mail.

[Add some zeroes dept.] New York State faces deficit of at least $3M in next budget according to report by Comptroller Tremaine to Gov. Roosevelt.

[Strangely unfamiliar dept.] The Rockefellers (John D. Sr. and Jr.) donate $1M to New York City's Emergency Employment Committee, bringing total to $4.133M. Between 13,000 and 14,000 men and women have already been given jobs.

Market commentary:

Market wrap: Stocks worked lower in dull trading on mixed business news. Bonds moderately active; US govts. dull, slightly lower; foreign govts. generally firm; corp. mostly higher. Commodities weak.

Observers remain conservatively optimistic; believe standard stocks can be bought on setbacks, though market likely to move in narrow range for some time.

[Ay Chihuahua! dept. Also note the decline in total security loans isn't nearly as dramatic as that in brokers loans.] Dull trading confirmed recent opinion on thoroughly liquidated position of market. Most comprehensive estimate of total loans on securities by Fed Reserve is currently $10.5B vs. $17B on Oct. 4, 1929. Figures on security loans suggest “most of the long road toward reestablishing the market on a sound basis has been traveled.”

[Note: Major banking crisis is in process of erupting.]Comptroller of the Currency J. Pole says general banking situation hasn't changed much in past year; metropolitan banks generally not a problem, but country banks having a difficult time in some cases.

Considerable importance seen in persistent recent support for pivotal issues; attributed to “important industrial and financial interests” that were out of the market for 7 or 8 months.

Market seen mostly in professional hands, with little outside interest; good-sized short interest remains outstanding.

Yesterday's rail freight report considered disappointing; 17.6% drop from 1929 was largest since Oct. 18, and drop from 1928 was 24.2%, largest this year.

C. Gordon, Bank of Montreal pres., says Canada less affected by depression than almost any other country; “In this virile country of Canada with its abounding resources there can be no permanent depression.” Sees benefit from turn to domestic markets, believes Canada will lead recovery when the turn comes.

Christmas shopping optimism: Christmas club savings this year will total a record $600M-$700M, to 9M depositors. Stores on Fifth Ave reportedly as crowded as a year ago.

Industries generally free from overproduction: steel, chemicals, food, tobacco, electric power, meat packing, shoes.

Agriculture Sec. Hyde sees remedies for farm depression as production adjustment, national land use policy, organizing cooperative groups of growers for collective action, cutting farmers' tax burden, and improving rural credit conditions.

Electric Power & Light stock has declined from a yearly high of 103 1/2 to 37 1/2, even as earnings increased from $2.79/share in 1929 to $2.94 this year.

Economic news and individual company reports:

Pres. Hoover sends Congress 1932 fiscal year budget of $3.933B, up $221M from prev. year; 1% income tax reduction won't be continued in 1931.

US electric production in Oct. was 8,161 GWHr, down 6.3% from 1929. Avg. daily production in Oct. was 2% over Sept. vs. usual 3.5% seasonal rise. However, earnings are running 1%-2% ahead of 1929 due to successful campaign to increase domestic and commercial use.

US Steel ingot production for week ended last Monday was at 45% vs. 45% prev. week and 68% in 1929; independents were at 35%, vs. 37% and 65%; industry total was 39%, vs. 40% and 66%. Carnegie Steel (subsidiary of US Steel), Bethlehem, and others raise prices of steel bars, shapes, and plates for Q1 delivery by $1/ton; price rise came sooner than expected. Scrap prices continue to weaken.

Payments by US Veterans Bureau for year ended June 30 were $452.2M, up $19.4M from prev. year. Of this total, payment to disabled World War veterans was $155M; as of June 30, these payments were being made to 279,539 veterans, up 17,401 from prev. year.

[Add some zeroes dept.] Soviet oil production in year ending Sept. 30 was about 120M barrels, up 27% from prev. year.

Number of shareholders in 113 miscellaneous industrial cos. (chemical, drug, food, leather, paper, rubber, tobacco) was 382,975 on Mar. 31, 1930 vs. 268,865 in 1929 and 178,524 in 1925. Most popular: General Foods, American Tobacco, du Pont, Armour, Drug Inc., Texas Gulf Sulphur.

Rail equipment cos. organizing one or more finance cos. to finance increased equipment purchase by railroads.

State with the largest highway paving program in 1930 was Iowa, with 1,040 miles.

Companies reporting decent earnings: Hershey Chocolate.

Political joke:

“'No,' I said to him, 'I can't let you have 50 cents, because I'm broke and was going to ask you for it myself. And I haven't got any old clothing. I'm wearing all I've got. And I'm in such a tough way that I don't see how I can help you at all.' 'Well,' said he, 'I was going to ask you to vote for me for the House.' 'I can't,' said I. 'I'm running myself.'”

Wednesday, December 3, 1930: Dow 186.82 +1.34 (0.7%)

News flash from State of the Union address:

Temporary 1% income tax reduction won't be continued. Says capital gains tax leads to security inflation and retards recovery; asks study of effects. Subject of Prohibition not mentioned at all. Modification of anti-trust laws should be investigated but against repeal of Sherman Act. Rails should be consolidated through new legislation to strengthen condition. Federal public works should get additional $100M-$150M for temporary expansion to already large $500M/year program. Asks for seed and feed loan program for drought stricken farmers. Children's health should be aided by small Federal program, as recommended a year ago. Seeks tightening of immigration law and deportation of criminal aliens and those illegally here.

More stuff from State of the Union:

[Note: Overall, not a bad speech in my opinion - more content than is usual today. Full text here.]

Fundamental strength of economy unimpaired; progress in peace, security, education, science, moral and spiritual awareness.

Origins of worldwide depression lie in overspeculation and in worldwide overproduction, leading to demoralizing price falls, decline of buying power, and unemployment. Political unrest also has prolonged and deepened downturn.

Extent of downturn is 15%-20% by various indexes. At this time, major forces of depression are now outside US. Nevertheless, encouraged economic activity is holding at 80%-85%, financial and industrial institutions have come through unimpaired. Important to remember these crises have been met many times before, and US is now stronger and richer than ever in its history. US is largely self-sustaining, can “overcome world influences and ... lead the march of prosperity.”

Depression can't be cured by legislation or executive pronouncement. Recovery can be helped by cooperation, govt. can encourage this. Cooperation has included agreement to maintain wage levels and labor peace; distribution of available work to maximum number of employees; acceleration of public works and construction by rails and utilities to degree above even the most prosperous years (total of $7B in 1930 vs. $6.3B in 1929). These measures have broken the precedent of previous depressions, when wages and public works declined.

Organization of local relief and employment committees has kept suffering to a minimum; unemployment is far below other large industrial countries. More extensive organization has been set up after it became clear problem would last through winter; response has been gratifying.

Federal govt. has contributed with greatest program of construction in our history, exceeding $500M annually vs. $253M in 1928; favors further expanding these activities temporarily by $100M-$150M. Some are proposing still more govt. projects, but many will be unsound economically or not ready for an immediate start. Doesn't make sense to increase taxes to fund projects, since this will lead to a drop in private employment.

Deficit of about $180M expected for this fiscal year due to revenue shortfall of $430M, increased spending of $225M; the 1% income tax reduction must be discontinued, and even doing this, the “most rigid economy” will be needed to avoid tax increases.

Foreign relations maintained a high degree of goodwill; a number of arbitration and conciliation treaties will be presented to the Senate, as well as the revised World Court protocols.

Assorted historical stuff:

Sen. Bingham introduces bill allowing doctors to prescribe malt liquors for medicinal purposes. Rep. MacLeod introduces amendment allowing manufacture and sale of liquor for use in the home and “places of abode.” [Does it count if you practically live in the bar?]

[Was humbug some kind of a cuss word then?]Canadian Premier Bennett hits British PM MacDonald's failure to denounce British official J.H. Thomas' description of Canadian tariff proposals as “humbug”; says this indicates MacDonald's endorsement of “unusual and injurious” statement, Canada now forced to “embrace other means to strengthen position.”

Editorial by T. Woodlock: If, as now seems inevitable, we must have a govt. operated power plant at Muscle Shoals, we must at least keep thorough track of the details and results of the experiment so that we can finally get a fair and impartial comparison with private power cos.

Editorial favoring Gov. Roosevelt's appeal for saving money on “archaic” small local govts. by “radical readjustment of local chaos into a centralized authority ...”

Dr. M. Hutchinson [curiously, invented both Klaxon horn and the first electric hearing aid] announces invention of instrument to eliminate deadly carbon monoxide fumes from city streets, increase airplane efficiency by a third, and save nation over $1B annually in fuel.

[Isn't that kind of like decaffeinated coffee - I mean, what's the point?] German scientists discover method of growing nicotine-free tobacco.

At the galleries: Ralph Chait Galleries - one of the most important collections of Chinese ceramic art to come on the market in some time. The Old Print Shop - a rare series of old American temperance prints from 1840-1875, when the movement was forming. The Art Center - reproductions of the stained glass windows in the cathedrals of Chartres, Cologne, Nuremberg, and Canterbury.

Market commentary:

Market wrap: Stocks gained moderately in the morning, were steady as the State of the Union address was digested, then continued up following a short dip on disappointment Prohibition wasn't mentioned. Bonds mostly improved on slow trading; foreign govts. strong, South American up sharply; US govts. slightly down; corp. steady, speculative and convertibles up. Commodities strong.

Steel cos. strong on rumors of product price advance; rails rallied on mention of consolidation in State of the Union address.

[Strangely familiar dept.] “Due to the lack of demand from brokers and business, banks have been forced to seek employment for their funds in investments.” Many have criticized this heavy buying of investment securities by banks in the past year as risky. Bank defenders point out there's been a large increase in deposits too, so the ratio of investments to deposits is still relatively small.

Rep. L. McFadden, chair. of House Committee on Banking and Currency, blames numerous recent bank failures on “high pressure” bond salesmen who unloaded unmarketable, low-grade bonds on country banks not equipped for investment research.

[It seems the big interests are said to be operating every time there's a couple of up days in a row, and mysteriously disappear when the market turns down again.] Some say the market is now too big to have individual leaders as in the days of J.P. Morgan, Sr., and there has been no recognized bull leader for a decade or more. However, “everyone knows that the so-called large interests have taken concerted action to check market disruptions many times,” most recently this past month. “Eight years ago, the 'big interests' combined to support the market”; this was the beginning of the major bull market that ended in fall 1929.

E. Decker, Northwest Bancorp. pres., blames real estate and stock booms and depression on loose banking; interest rates and margin requirements should have been raised earlier. “Loose credit is the cause of more failures than credit difficult to obtain.”

[Ay Chihuahua! dept.] Observers believe market may be entering a period of dullness characteristic of the end of previous bear markets, when liquidation has been completed. Now watching closely for market to show ability to break out into a sustained advance, which would strongly indicate bottom of the 1929-30 bear market had passed.

Economic news and individual company reports:

Income tax receipts in Nov. were $28.223M vs. $28.281M in 1929; 5 months through Nov. $610.5M vs. $668.8M. Customs receipts Nov. were $36.365M vs. $44.126M; 5 months $170.6M vs. $262.9M. Gross public debt Nov. 30 was $16.101M vs. $16.568M in 1929.

Q3 net profits of 261 industrials were down 51% from 1929, lowest Q3 since 1924; rail equipment and paper were only groups showing increase. Q3 net operating income of class 1 rails was down 29%, lowest since 1923. Public utility net was only down slightly.

Rail freight loadings for week ended Nov. 22 were 779,757 cars, down 49,494 from prev. week and down 169,959 or 17.6% from 1929 week.

Meat packers make final argument in DC Supreme Court in petition for right to distribute foods (by modification of the 1920 Consent Decree).

Companies reporting decent earnings: Borden (dairy products), Lorillard (cigarettes), Kelvinator (refrigerators), Hygrade Lamp (lamps and radio tubes).

Film:

Lightnin', starring Will Rogers. Pretty dull fare; dime novel heros, and villians have gone out of style, and most “are satiated with stories of treacherous efforts to rob simple country folk of the old homestead.” Film is slow-paced, “and the star, Will Rogers, is not entirely happy speaking the outmoded dialogue assigned to him.”

Joke:

“Prospective Employer - Why did you leave your last post? Chauffeur - My guv'nor and his wife fell out, sir. Prospective Employer - But why leave for that? Chauffeur - Well, if you must know, sir, they fell out of the car.”

Tuesday, December 2, 1930: Dow 185.48 +2.09 (1.1%)

Note: For those of you in the New York area, the New York City Junto will be having a lecture and discussion Thursday evening featuring Amity Shlaes, author of The Forgotten Man: A New History of the Great Depression. I haven't read the whole book yet and have had a mixed opinion on what I've read so far, but there might be some interesting discussion. The NYC Junto is a free monthly discussion group sponsored by famed speculator (his term) V. Niederhoffer - the format is a short intro talk by the speaker, then a long period of pretty free Q&A. Click here for information.

Assorted historical stuff:

[Note: Audit an agency responsible for bailing out a large embattled sector of the economy? That's crazy talk!] Editorial: “Without the slightest wish to embarass the Farm Board, ... an accounting of its activities is due and owing to the taxpaying public.” Board has gone through $250M of appropriated $500M so far and failed badly at all its assigned objectives; “No public servant has carte blanche to use huge sums of money and give no accounting therefor.”

[Note: I thought this was an urban legend ... ] Metropolitan Life Ins. Co. reports death rate for first 10 months of 1930 was 8.3% lower than 1929.

[Note: Well, I guess even a maniacal dictator is right twice a day ... ] J. Stalin, Communist leader, says present world depression will get worse; one of periodic crises that mark progressive decay of capitalism; sees capitalist countries drifting surely toward war to crush weaker competitors and control markets; calls League of Nations impotent, predicts Versailles treaty can't endure.

Washington's current main interest in Communism is in reports from Moscow of melodramatic trials of anti-revolutionary plotters. “Curiosity is expressed as to the reason no American interest was named in the purported confessions of the Moscow plotters.”

Reichstag expected to approve Breuning financial program of 26 laws decreed using semi-dictatorial powers, due to reluctance to face new elections following large Fascist gains in municipal elections Sunday. Berlin stocks rally.

Interior Sec. Wilbur calls for conservation of nation's resources; criticizes waste of oil, gas by overdrilling; points out that in Kettleman Hills area of Calif. alone, 450M cubic feet of gas is wasted daily, making the total yearly waste of energy over twice the expected output of Hoover Dam. Conservation rules are currently subject of several ongoing litigations in process of appeal.

Much speculation on whether Congress will manage to pass needed legislation and avoid an extra session, as strongly desired by leaders of both parties. Little new legislation was proposed by Cabinet members - Labor Sec. Davis requested immigration restriction, while Postmaster Gen. Brown wanted higher rates. Some surprise at Pres. Hoover's determination to send World Court protocol to the Senate, which may provide an ideal excuse for “days and weeks” of debate.

[Note: Sheer Genius dept.] Champagne produced by Spanish chemist from Cuban sugar cane said to be “equal in every way to the French vintage.” Lord Inchcape, shipowner, predicts time when ships will be propelled and lighted by wireless transmission of power.

Shimizu tunnel completed through “mountain backbone of Japan”; at over 6 miles, is longest rail tunnel in Asia, will cut Tokyo-Niigata travel time by 4 hours.

Proceeds from Army-Navy football game to be played at Yankee Stadium Dec. 13 will be donated to Salvation Army Relief Fund; close to $1.3M expected.

New School to present unusual finance course by F. Vom Saal developing principle that “average investor can and should train himself to become his own investment counsel.”

Mother Jones, radical and one-time leader of United Mine Workers of America, dead at 100.

Amusing story of Hetty Green [died 1916 at 81, one of world's richest women, subject of many rumors of miserly eccentricity] blackmailing a newspaper publisher who had printed a story saying she was holed up in Hoboken to receive suitors for marriage. Mrs. Green showed up at the publisher's club the next day carrying some of the publisher's love letters stolen by his valet and threatening to read them aloud to all comers. They quickly came to an agreement, though Mrs. Green kept the letters, since “Down in Wall Street I have learned that it never hurts to hold a little collateral!”

Market commentary:

Market wrap: Stocks firm on very light trading, with traders awaiting Pres. Hoover's State of the Union address to Congress. Bond market also dull; US govts. firm, foreign govts. show rallying tendencies; domestic corp. mostly lower.

Conservative observers confident, believe recent reaction only of technical proportions; recommend buying standard stocks “on a scale” during setbacks.

“'We just have to grin and bear it,' remarked one trader to another. 'I can bear it all right,' replied the other ... 'but grinning is out of the question.'”

Note: It's interesting to see how much of current commentary is similar to the next two items, i.e. looking for patterns in past recessions and expecting them to more or less mechanically repeat.

Car industry observers see striking similarities with last serious depression in 1920-21, though decline has been more severe this time. Based on this, see Nov. and Dec. as turning point; most authoritative estimates have production in 1931 Q1 about 15%-20% below 1930, but “even on this conservative basis” production would nearly double from current quarter; possible sharp recovery in spring if pattern holds. This year's production will be lowest since 1923; Oct. production is at 1916 levels, which “cannot long continue to supply a normal present market.”

Harvard Economic Society says business declined in Nov., and is likely to continue down in immediate future, but “experience during past depressions indicates that the decline is nearing its end, and that recovery will begin in the first half of next year and probably in the first quarter.”

Economic news and individual company reports:

Western rail executives make long list of requests to ICC for relief of current difficulties, including postponement of lower grain rates for at least a year, increase of some long haul rates, support of regulation on motor transport, and requiring waterway transport to be profitable. Claim that their operating profits fell short of “fair return” defined in law even in record year of 1929.

Fed. Reserve member banks weekly report for Nov. 26: loans on securities down $77M to $7.761B, “all other” loans down $86M to $8.766B. Investments held by banks are up $400M in the past 8 weeks and $1.4B since start of Oct. 1929.

Fed. Reserve reports department store sales up 9% in Oct. over Sept., more than the usual seasonal increase, but down 8% vs. Oct. 1929.

Oct. meat sales up 4% from Sept. but down 18% from 1929.

Agricultural exports in Q3 were $423.2M vs. $592.1M in 1929; imports were $401.8M vs. $688.0M.

1930 Automobile Salon opens at Commodore Hotel; 90 “motor cars de luxe” on exhibit, featuring “artistic designs, beautiful color schemes,” new safety and comfort features, and the “maximum in luxuriousness.”

Many states and cities will seek to increase gasoline taxes; estimated total gas taxes in 1930 are $515M vs. $431M in 1929.

Four banks close in Ill. and one in Conn.; largest was First Nat'l Bk. of Marion with $2M deposits, one of largest and oldest banks in coal mining area of Ill.

[Note: These match monopolies were no joke. According to John Train's account, some countries had squads of agent provocateurs roaming the streets asking people to light their cigarettes. Those who offered a non-monopoly match were subject to large fines. ] Ivar Kreuger to negotiate loan to Italian govt. in exchange for match monopoly.

England continuing to experience drain of gold to France, “slow but steady” capital flight. French experts suggest extension of credit to Bank of England by Bank of France; issuing British loans in the French market seen impossible due to “demoralization of the market.”

Canadian report: Index of employment Nov. 1 was 112.9 vs. 116.2 Oct. 1 and 124.6 Nov. 1, 1929. Oct. exports $84.3M vs. $121.4M in 1929; imports $76.2M vs. $116.3M. Trade boards “swamped” with inquiries from US and British industrial cos. on establishing Canadian plants after Sept. “emergency tariff.”

Companies reporting decent earnings: United Light & Power, Electric Power & Light, Lambert, US Pipe & Foundry (gas and water pipe, benefitting from easier municipal financing), De Beers, Bourjois (cosmetics).

Prohibition joke:

“A candidate for office ... was confronted by a woman, a strong advocate of prohibition. 'Now,' said the lady, 'it is vital that you express your views on prohibition; are you dry?' 'Madam,' replied the candidate, 'nobody knows how dry I am.'”

Film:

The Lottery Bride, operetta produced by Arthur Hammerstein, set in Norway. Designing villain interferes with young couple in love. The girl “seeks Nirvana in becoming a 'lottery bride,'” and by sheer coincidence is matched with her lover's brother. Lover happens to be there when she arrives. Villain arrives later as captain of a dirigible bound for the North Pole. Happy ending at the Pole, “on some of William Cameron Menzies' most exquisitely carved ice blocks.”

Monday, December 1, 1930: Dow 183.39 +2.48 (1.4%)

OK, this is the first day of the new more-opinionated format. I'll try to make the transition not too jarring.

Assorted historical stuff:

[Note: My general impression from reading a few months of this guy's writing is that he's extremely long-winded and obtuse. It was therefore surprising to read a cogent and well-written editorial by him with a constructive proposal for attacking a big piece of the debt problem at the time.] Editorial by T. Woodlock: Problem of European debts to the US is becoming a crushing burden. “The US did not lend gold to Europe; she lent an immense mass of commodities of all sorts and many services. And the 'money' debts” that Europe owes in return are now equivalent to a much larger amount of commodities and services. International debts must be treated differently from individual ones; a “first-class nation ... cannot be put into a receiver's hands and it cannot be liquidated.” Debts between nations generally are a threat to peace; when they are a very heavy burden on almost all major countries, the danger is intensified. The US should reduce the debts owed it proportionally to price declines; this would sacrifice “nothing which ... is fairly ours to claim, and nothing which in fact ... we are even likely to receive.”

[Note: Sad but probably true dept.] House Speaker Longworth says he's opposed to an extra session of Congress; believes business recovery in the past year has been retarded by long Congressional sessions, and an extra one would result in further delaying the recovery.

New Congressional session formally opens today, though main business of the session has been under way for 3 weeks under the House Appropriations Committee. There's unlikely to be time to take up much other than the appropriations bills in this session, though the Glass financial hearings will attract some interest. Once the session ends March 4, barring an extra one, “the country can pretty well forget Washington and politics” until Dec. 1931.

[Note: Strangely familiar dept.] About 25 years ago, there was much talk about the life of copper industry reserves, with Utah Copper given 30 years, Nevada Consolidated less than 20, etc. Strangely, even though no major new mines have been discovered in the US and most of these mines are now producing two to three times more copper than 25 years ago, you now hear little about this problem - in fact, the complaint now is that too much copper is available and production must be cut.

[Note: The carrier pigeon version of John Henry ... ] Five carrier pigeons recently won a race with a Norwegian air force plane travelling 105 mph between the cities of Oslo and Jesshim in Norway, a distance of 70 miles. Pigeons were released at the same time as the airplane took off.

[Note: Not sure if Prune Center or Silicon Valley has a nicer ring to it.] San Jose, Calif. is proudly known as “Prune Center”; the Santa Clara Valley, of which San Jose is the commercial center, has about 70,000 acres of prune bearing trees.

Market commentary:

This section will be shorter from now on. In my opinion, one of the most important lessons you can get from this blog is that the day to day blather about why the market did what it did (which takes up most of this section and which is most of what's on CNBC, MSNBC, etc. these days) is almost entirely random noise, though some of it is undeniably entertaining.

Market wrap: Stocks slightly firmer on very dull trading. Bonds mixed; corp. down with many new yearly lows; foreign and US govt. mostly steady.

Noteworthy market moves in past week: US stock rally checked. Most classes of bonds trended down, with notable exception of US govts. Berlin stocks down sharply early in week, hitting four-year lows, but recovered some of the losses toward end of week; no sign of capital flight. Grains traded in a narrow range, tending downward. Cotton drifted down close to season lows.

Market observers still “conservatively bullish” although bears are said more confident, and renewing selling operations.

Conditions now seen favoring further market decline; Dec. is usually an irregular month for stocks, Congress will reconvene, and industry is seasonally unlikely to improve before end of year. However, “no thought in important quarters that the selling movement will be resumed on anything like the scale” from Sept.-Nov.

[Note: Rule 1 of banking crisis - there is no banking crisis.] National City Bank notes epidemic of bank failures, and that “processes of deflation operate in a vicious circle” but is nevertheless optimistic: “obviously this sort of thing has to come to an end some time, and by the very nature of the circumstances the turn comes ... [when] everything looks the blackest.” Business decline has lasted about 15 months and is 35% below peak; this is as severe as any decline in past 50 years, warranting “a strong assumption that the decline is nearing its end.” Local banks were clearly overextended in many parts of the US, leading to some inevitable collapses, but overall banking system is “exceedingly strong” with banks having little indebtedness to the Fed. and over $7B of paper usable for rediscount there. [July 15, 2008: US banking system is “well capitalized.” - B. Bernanke.] No general breakdown of credit has happened or will happen.

[Note: The creeping stage - well, at least you can't accuse him of wild overenthusiasm.] W. Woodin, American Car & Foundry Chair., says believes we've hit bottom and business will gradually improve from now on: “It is a little bit like a child that first must creep before it walks. I really believe that we have reached the creeping stage toward rehabilitation of business.”

A. Sloan, GM chair.: “No one can deny that the economic machinery of the US and of the whole world is badly out of joint. The contributory causes are so numerous that no single factor can be emphasized.” Thinks readjustment would have taken place regardless of the stock market crash “because we exceeded the speed limit [in industry] by developing an obsession for high records.” Believes we can only recover at a normal rate.

Economic news and individual company reports:

[Note: US unemployment wasn't very well measured at this time, so data points like this are interesting. Perkins later became Roosevelt's Labor Sec. and first woman in a US Cabinet.] NY State Industrial Commissioner Frances Perkins reports on Nov. study of unemployment in Buffalo, NY - of 14,002 men and women, 19.9% were unemployed, of which 16.1% were able and willing to work; 16.6% were employed part time and 63.5% full time. Compared to Nov. 1929, proportion of men over 18 unable to find work was up over 2.5 times, as was proportion working part time.

Irving Fisher's index of 200 commodities for week ended Nov. 28 was 80.6 vs. 80.8 previous week and vs. 92.3 a year ago.

New car inventories in US and Canada were 304,690 on Nov. 1 vs. 562,800 on Nov. 1, 1929.

O. Young, GE chair., returns from Europe, refuses for now to comment on conferences with leading bankers on world's gold problem.

Some investment trusts (similar to mutual funds) are selling stocks they own and buying up their own shares due to the 20%-30% discount their shares are selling at. [Note: Apparently the idea of liquidating and returning the cash to shareholders was too horrifying to contemplate.] Gossip has it that some brokerage houses that sponsored investment trusts have found they didn't bring the “joy to their parents that had been expected” and are looking for a graceful exit.

Companies reporting decent earnings: Parke-Davis (drugs, has paid dividends for 51 years without interruption), Engineers Public Service.

Bond market joke:

“'Good morning, sir. I'm a bond salesman.' 'That's all right, my good fellow. Here's a quarter - go buy yourself a square meal.'”

Forgotten genuises dept.:

One of the great pleasures of doing this blog is coming across entertainers of the time who I've never heard of before, but who are absolutely fantastic. Here's a little of Borrah Minevitch's harmonica band, mentioned on Nov. 24 as part of the Sweet and Low revue:

Play "Borrah Minevitch & His Harmonica Rascals" on Youtube

Play "Borrah Minevitch - Daybreak Express" on Youtube