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The Warnings, the Margin Calls, and the Fed's Fatal Mistake
Audio is available on Spreaker — see link below.
Charles Merrill saw the 1929 stock market crash coming and said so publicly — yet nobody listened. This episode traces the margin mechanics, bucket shop speculation, and the Federal Reserve's catastrophic monetary contraction that turned a market crash into the Great Depression.
Audio is available on Spreaker — see link below.
Before the crash, Charles Merrill was one of the most successful men on Wall Street. After the crash, he was one of the few who could say he saw it coming.
Charles Merrill ran a brokerage firm at a time when brokerage firms were essentially printing money. The market had been climbing for most of the decade.
Merrill understood the mechanics that made a crash not just possible but likely. The margin system was one.
You can't understand what happened next without understanding what the Federal Reserve chose to do, and what it chose not to do. When the market began its collapse in late October nineteen twenty-nine, the American economy needed one thing above almost anything else.
Three major waves of banking panic swept across the country between nineteen thirty and nineteen thirty-one. By the time they were done, around ten thousand banks had suspended operations nationwide.
By the time the worst was over, one in four American workers was unemployed. That was the headline number.
Franklin Roosevelt won the presidency in nineteen thirty-two in a landslide that was less about ideology than desperation. Americans weren't voting for a specific programme.
The reforms helped. They didn't restore what had been lost quickly.
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