YouTube Transcript:
The Stock Market Crash of 1929 – Part 1: To The Moon!

this episode is brought to you by jll
get an Insider view into the world of
commercial real estate with jll's
podcast Trends and insights the future
of commercial real estate whether you're
curious about making cities more
sustainable the evolution of office
space or AI opportunities this podcast
will help keep you a step ahead tune in
for candid conversations with Business
Leaders about the biggest Trends
impacting how we live work and play
subscribe to Trends and insights now at
jll.com slmp podcast hello and welcome
to conflicted the History Podcast where
we talk about the struggles that shaped
us the tough questions that they pose
and why we should care about any of it
conflicted is a member of the Evergreen
podcast Network and as always I'm your
host Zach Cornwell guys I am very
excited about today's episode it is
honestly a topic that I've had my eye on
for a while but because it's such a
sprawling and complex subject I'd been a
little nervous to really dive in and
tackle it but now seems like the right
time over the next few episodes we will
be examining one of the most notorious
events in American history arguably
world history during the course of one
week in October of 1929 $30 billion of
wealth vanished Into Thin Air what began
as a trimmer of panic in downtown New
York mutated into a financial shock wave
that rippled across the entire United
States and out into the wider world this
event destabilized the world economy it
impoverished entire generations and it
marked the beginning of the long
Collective trauma We Now call the Great
Depression one historian called this
event quote the most climactic financial
disaster in history another called it
quote the worst economic collapse in the
history of the modern industrial World
another said that quote few man-made
events short of the World Wars created
so much pain and bitterness and the fear
that it would occur again I am referring
of course to the stock market crash of
1929 sometimes it's called the Great
crash or the Wall Street crash of 1929
it's a story that most of us are vaguely
aware of at least on a surface level
when we hear phrases like Wall Street
and crash and 1920s we tend to picture
guys who look like the Monopoly man
leaping to their deaths from the top of
tall buildings men who in their ravenous
greed lost it all on the stock market
and faced with the petty humiliations of
poverty chose to end their lives men who
would rather die than be poor that
mental image however like a lot of Pop
history imprints is a misleading one the
story of the 1929 stock market crash is
much more than Bulls bears and suicidal
Brokers it's not about line graphs
spreadsheets or stock prices underneath
all those drab grainy Snippets of black
and white photography is a story
absolutely bursting with color it is a
rich human drama on an international
scale one that completely reshaped the
world and this financial disaster
represents a crucial fork in the road on
the path that led us to where we are
today but as important and Infamous as
the 1929 stock market crashes it is also
a source of intense controversy for many
many decades economists historians and
financial analysts have been performing
autopsies on the corpse of the Great
American bull market trying to explain
why exactly the crash happened and
everybody has a different Theory some
ideas are more widely accepted than
others of course but to this day there
is no universally accepted explanation
for what caused the most cataclysmic
financial disaster in history and that
underlying mystery is what we will
attempt to untangle over the course of
the next several episodes now at this
point you might be bracing yourself for
an avalanche of complicated Financial
jargon stock market lexicon and economic
Concepts Wall Street famously has its
own Byzantine and confusing language one
that people have dedicated their entire
lives to becoming fluent in and while we
we definitely will be Crossing that
language barrier to some extent this is
not going to be a vocabulary lesson I
promise this topic like every topic on
conflicted is fundamentally about people
and I wanted this series to be a human
history of the crash we will experience
this event not through bone dry numbers
or stats or stock market abstractions
but Through The Eyes of real Flesh and
Blood people that lived through this
thing good people and bad people and
everybody in between will meet
bootleggers and bankers career criminals
and crusading prosecutors we'll meet
swindlers charlatans and Sho shine boys
farmers and fortune tellers the truth is
the 1929 crash affected every strata of
American society and our cast of
characters will reflect that reality
this is a big story it is a clock with
many moving pieces and over the course
of the next three episodes we will
disassemble that Machinery pick it apart
and lay it all out in an attempt to
understand why the great crash happened
and most importantly to understand the
people that it happened to I am very
excited to share this story and these
characters with you so without further
Ado let's jump in welcome to the stock
market crash of
1929 part one to the
[Music]
Moon
[Music]
it's Tuesday October 29th
1929 we're in Manhattan on the floor of
the New York Stock Exchange and for
millions of people the world is ending
on a normal day the trading floor of the
New York Stock Exchange was a Prim
proper and orderly place a well- greased
machine in which men in fitted suits
bought and sold shares on behalf of
clients from as far away as London
Athens and Tokyo 2,000 employees clerks
analysts and telephone operators
scuttled and predestined paths along the
16,000 ft trading floor like so many
obedient bees and there was a lot of
honey in this Hive the stock market was
as historian Karen Blumenthal writes
quote the greatest Fountain of wealth in
the history of America end quote on a
normal day 3 million shares might change
hands in this room on a good day an
investor could watch the stock prices of
American companies climb up and up and
up in the past 6 months millions of
dollars had become billions of dollars
in a gravity and logic defining bull run
the likes of which no one had ever seen
it was what one contemporary called
quote a Magic Carpet Ride end quote but
Tuesday October 29th 1929 was not a good
or normal day on Black Tuesday as it
came to be known the New York Stock
Exchange looked more like a mosh pit
than a trading floor people are
screaming they are crying the stock
Brokers are having their fitted suits
ripped and shredded to Pieces by
desperate investors trying to sell their
stocks and fast the floor is covered
with an ankle deep layer of paper buy
orders sell orders ticker tape notes
scrap dead paper as thick as snow that
people are waiting through to get to a
broker who can sell their shares Outside
The Exchange 10,000 people have crowded
along Wall Street trying to squeeze
closer trying to understand what the
hell is happening and at this point in
the morning stock prices are falling
almost vertically like cans off a
supermarket shelf one Trader remembered
and it's happening so fast that by the
time the clerks can scribble the current
prices on the Blackboard they've already
fallen by another 5 10 20 points in the
first 30 minutes of the trading day two
billion dollar has evaporated life
savings pensions nest eggs rainy day
funds all gone like cotton candy
instantly dissolving in a puddle it's
just gone people are fainting on the
trading floor literally collapsing and
those that are conscious are getting
angry and inconsolable as Blumenthal
writes quote a middle-aged man with a
tear in his jacket broke out from the
crowd moaning I'm sold out I'm sold out
another man screaming at the top of his
lungs that he had been ruined grabbed a
messenger by the hair and lifted the
youngster off his feet the messenger
twisted and screamed but the man
wouldn't let him go finally the
youngster Broke Free and fled the
exchange crying leaving the yelling man
with a fist full of hair end quote there
is no other word for the mood then Panic
animal caught in a trap Panic as one
stock exchange employee named William
Crawford remembered quote they roared
like a lot of lions and tigers they
hollered and screamed they clawed at one
another's collars it was like a bunch of
crazy men end quote and what's worse the
Panic is spreading from its epicenter at
the New York Stock Exchange just down
the street at the famous Trinity Church
the pews are packed with people of every
faith and Creed Catholics Protestants
Jews even atheists all praying together
the church is flooded with frightened
despondent people seeking some sense any
sense of comfort all across America
banks large and small are filled with
angry customers demanding to withdraw
their money and all across America banks
are saying we can't we don't have your
money anymore by the time the closing
bell rang on Black Tuesday at 5:32 p.m.
16,383 700 shares had been sold at the
New York Stock Exchange representing a
loss of $10 billion in value in one day
as historians Gordon Thomas and Max
Morgan wits point out with sobering
Clarity quote that was twice the amount
of currency in circulation in the entire
country at the time end quote but in the
midst of all this fear and misery there
was at least one person making money in
New York that day making a fortune when
so many other people were losing
everything his name was Jesse list and
Livermore and he had seen this coming by
now you guys know the drill I usually
like to give a main character alert when
we meet someone super important and this
is your main character alert while Wall
Street was gripped in his area Jesse
Livermore was 7 m up town on the 18th
floor of a lavish office overlooking
Fifth Avenue and it was not an easy
place to gain access to as Thomas and
Morgan witz write quote the Livermore
Suite in the hex Shure building on Fifth
Avenue was protected at street level by
a doorman who denied its existence only
those whose names appeared on an
approved list were allowed past and then
they were whisked up by elevator to the
18th floor all visitors were there
further screened by a Burly Irishman
famed for his ham sized fists before
being allowed to enter the unnumbered
door of livermore's Citadel end quote
and if you were lucky enough to gain
access to Jesse livermore's office on
that Tuesday morning you would have seen
a slim 52-year-old man with a thinning
head of slick back blonde hair with his
sharp suit and weak chin he looked a
little bit like a very well-dressed
Turtle not that the rotating stable of
show girls and starlets he routinely
slept with cared another thing you would
have noticed about Jesse liver is that
he seemed perpetually suspended in a
roing haze of cigar smoke he was a chain
smoker but a chain smoker with very
expensive tastes every month he had over
300 handrolled cigars flown in directly
from Havana Cuba the best money could
buy and limore had plenty of that to
spare he was a self-made
multi-millionaire who delighted in
ostentatious displays of wealth in
excess as Thomas and Morgan wit write
quote he bought Champagne by the truck
caviar by the case and Suits by the
Dozen end quote he owned two Yachts
multiple houses and a distinctive canary
yellow Rolls-Royce that fed him around
the city like a modern-day Pharaoh
appearances however can be deceiving
Livermore may have been in his own words
quote disgustingly rich but he wasn't
snoody or pompous or a pinky out kind of
guy he didn't come from money he talked
with the thick accent of a Boston dock
worker and was armed with the dirty
jokes to match he had no interest in art
or culture or music he thought it was
all a waste of time unless of course it
could help get you laid the only
literature he could quote by heart was
the King James Bible but beneath this
weird off-putting paradoxical package of
obscene wealth and blue collar New
England charm was an astonishingly
intelligent human being Livermore was
easily the smartest man in any room he
walked into he was both a math guy and a
words guy which in my experience is as
rare as a unicorn and twice as
impressive he had a natural gift for
language and verbiage as Thomas and
Morgan wit write quote Livermore could
speak as well as he could write despite
his lack of sophistication and social
polish he possessed a natural command of
the language much of what he dictated
was good enough to go straight into
print end quote and Livermore bent that
formidable intellect toward his one true
love the thing he cared about more than
any car or yacht or showgirl or box of
Cuban cigars in his heart of hearts
Livermore didn't really love any of that
stuff he didn't even love being Rich
Livermore was in love with the game the
market the adrenaline rush of Fortunes
banked and broken the roller coaster
Thrill Ride that only the stock market
can provide and he was very very good at
it how good you might ask well on Black
Tuesday after a week that had snapped
the spine of the American economy rocked
Banks and brokerages from coast to coast
driven millionaires to financial ruin
and shocked the International Community
Jesse Livermore walked away away with a
profit of $100
million that's about 1.5 billion today
so how did he do this how was he able to
predict a crash that blindsided so many
other people well to answer that we need
to go back way back before 1929 before
the Roaring 20s before World War I
before anyone on Main Street had even
heard of Wall Street we have to go back
to the place where livermore's love
affair with the stock market first began
it all started with a $5 bill and a tiny
corn farm in Massachusetts when Laura
Livermore gave birth to her third child
in a small farmhouse in 1877 the timing
was not great it was an unplanned
pregnancy it was an accident money was
tight and her husband Hyrum was
extremely not psyched about having yet
another mouth to feed but when the baby
boy came bouncing into the world they
named him Jesse and hoped for the best
Laura Livermore was a simple
kind-hearted Woman Who Loved all three
of her children dearly but almost
immediately she noticed something was
different about her youngest son Jesse
the kid was freakishly smart by the age
of four he could read and write as well
as children twice his age one day when
he was six Laura found Jesse fishing the
crumpled pages of a newspaper out of the
trash can and smoothing them out he was
reading the financial Pages as it turned
out numbers just came naturally to Jesse
grade after grade year after year he
amazed his teachers at school with his
ability to formulate complex equations
in his head no pen no paper he could
just crunch the numbers on the Fly and
when he was around 10 or 11 he
challenged his math teacher to an
arithmetic competition and won it was
also around this age that Jesse started
to notice that he was very popular with
the opposite sex the girls loved him
there was just something magnetic about
him something too subtle for words at
home Jesse's mom Laur La could see her
son was growing into someone very
special on the surface Jesse was just a
pale skinny kid with a mop of strawberry
blonde hair but his mind was like a
hummingbird flitting from problem to
problem with ease as long as Jesse could
continue to get an education there was
no telling how far he could go but
Jesse's dad had other plans to hyram
Livermore his youngest son Jesse was
just the soft runt of the litter
pampered by his indulgent mother and
obsessed with useless books and
arithmetics because after all math
couldn't pull a plow math could not
plant crops math couldn't make money and
the liverm mores were always desperately
short of that so when Jesse was 14 years
old his dad hyram pulled him out of
school and put him to work on the Family
Farm And for a time it seemed like
Jesse's sparkling intellect might die on
the vine that this blossoming Prodigy
would be lost and a drift in the soul
crushing backbreaking manual labor of a
common field hand but Laura believed her
son undeserved much more she did not
want to see him turn out just like his
dad tired unimaginative and bitter so
according to one historian quote
unwilling to squander her son's glowing
potential she packed him a satchel
filled with some food and a few changes
of clothes and she slipped him a $5 bill
as per his mother's instructions
Livermore snuck out the front door late
one evening flagged down a passing wagon
and hitchhiked out of town end quote
over the course of his life Jesse Li
would love many many many many women but
the most important and influential woman
in all the long years of his life was
his mom Laura didn't know it yet but her
son would use that $5 bill to become one
of the richest men on planet Earth but
the babyfaced 14-year-old that snuck off
the corn farm in 1891 was a long long
way from Fifth Avenue riches thankfully
the young mathwiz knew exactly where to
get started when his hitchhiking ride
asked him where he wanted to go Jesse
didn't hesitate take me to the local
stock brokerage back in livermore's day
the stock market worked more or less
exactly the same way it does today
investors can buy shares or little
pieces of publicly traded companies the
price of those shares fluctuates based
on the value of the company real or
perceived if the stock rises above the
price you paid for it you make money if
it goes down you lose money in a perfect
world you invest in a company because
you believe in its long-term future and
by extension you believe its value will
rise over time in return for your
confidence and cash that company uses
the money you've invested to fund
research expansion Innovation all that
good stuff in theory anyone can invest
in stocks and make money but the stock
market in the last days of the 19th
century was much less accessible than it
is today there is no Robin Hood app
there is no E Trade if you wanted to
play the stock market you had to go to a
stock brokerage and speak to a stock
broker you say hello good sir I would
like to buy this many shares of this
particular company and that broker would
say why yes sir it would be my pleasure
the broker would then place the order on
your behalf and you would receive a
paper certificate that proved your
ownership of those shares at that price
and if you ever lost confidence in the
health of that company or just wanted to
bank a profit you could simply sell your
shares to a new buyer a transaction that
was facilitated by that broker for a
small fee but at the turn of the 20th
century the vast majority of Americans
didn't even know what the stock Market
was much less how to buy and sell stocks
most people in the United States were
living below the poverty line so the
idea of having enough extra money to
invest in something as intangible and
Abstract as the stock market was a
completely alien concept as a result the
stock market was a big boys club only
limited to the ultra Rich Ultra
connected and Ultra Bor with plenty of
fun money to burn it was not a club that
looked kindly on Outsiders and
14-year-old Jesse Livermore was most
definitely an outsider when he walked
into a brokerage firm in Boston called
Payne Weber and Co but Jesse didn't want
to buy any stock he wanted a job these
skeptical Boston Brokers took a chance
on the Pasty softspoken Farm Boy and
just like that Jesse Livermore had his
foot in the door it was not a glamorous
gig Jesse's job was to sit at a
chalkboard all day long and record the
stock prices of certain companies as
they fluctuated throughout the day not
exactly a challenging ask for a mind as
sharp as his a few years earlier he'd
made a fool of his math teacher on a
chalkboard just like this one and now he
was working as a glorified printing
press at first it seemed like Mindless
robotic drudgery scribble the price wait
for the change erase the price write the
new one repeat repeat repeat but as the
weeks turned into months Jesse started
to see something something that no one
else could he was seeing patterns Trends
correlations he soon discovered that
that he could read the ticker tape like
a sheet of music he could see rhythms
and Melodies and motifs that were all
but invisible to everybody else Jesse
looked around at all these professional
Brokers and buyers and realized they had
no system they were just guessing
gambling working off of bogus tips and
meaningless hunches Jesse barely on the
right side of puberty decides to create
his own system he gets himself a little
notebook and starts recording the stock
prices at the end of each day he does
this for 6 months it me nothing at first
but with each passing day he got more
and more data and like standing an inch
away from a painting and slowly backing
away it all started to come into Focus
as Livermore remembered years later
quote those quotations did not represent
prices of stocks to me so many dollars
per share they were numbers of course
they meant something they were always
changing it was all I had to be
interested in the changes why did they
change I didn't know I didn't care I
didn't think about that I simply saw
that they changed and that was all I had
to think about 5 hours every day and two
on Saturdays that they were always
changing end quote over the course of
his data Gathering Jesse starts trying
to guess what the price of a particular
stock would do over the course of a day
a week a month he makes predictions and
then he records which of his predictions
were correct or incorrect this
meticulous data Gathering combined with
an Indescribable gut instinct is what
starts to set Jesse Livermore apart
after months of doing this Jesse decides
to put his system to the test one thing
Americans have always excelled at is
gambling there is nothing we won't
gamble on some people bet on horses
others bet on boxing or football but all
over the United States in the early 20th
century there were places where you
could gamble on the fluctuations of the
stock market itself and these were
called bucket shops as mentioned earlier
very few Americans had enough cash to
actually buy shares on the stock market
but bucket shops were a place where you
could go to get in on the action without
the Steep price of admission bucket
shops allowed you to bet on the movement
of a particular stock without having to
buy actual shares think of it kind of
like a dog track or a horse race or a
casino you're trying to pick winners and
if you guess correctly you get a nice
little payout and these were not exactly
the most respectable joints so imagine
their surprise when a babyfaced
blue-eyed teenager walked in on his
lunch break looking to make some money
as Jesse Livermore remembered quote I
had never bought or sold anything in my
life and I had never gambled with the
other boys but all I could see was that
this was a grand chance to test the
accuracy of my work of my hobby end
quote equipped with his trusty notebook
Jesse placed his very first bet on a
Railroad stock that he believed was due
for an upswing he put down $5 the same
amount his mom had given him the night
she'd helped him leave the farm and lo
and behold Jesse was right about that
stock he made a profit of $3 12 cents on
the trade and from that moment on Jesse
Livermore was truly madly deeply in love
with the stock market what began as an
experimental side hustle became a
full-blown infatuation Jesse placed bet
after bet after bet at the bucket shops
all over Boston and more often than not
his predictions were dead on he
discovered that he could make several
months worth of wages in a single day's
plunge into the bucket shops when he was
16 2 years after he' left home just
Livermore went back to the farm and
slapped 1,000 bucks on the kitchen table
his father who'd underestimated him all
his life was stunned into silence his
mother Laura was proud but worried about
where this path might lead her teenage
son but as Jesse's profitable hot streak
continued he started to look suspicious
to The Operators of these bucket shops
they grew resentful of this wonderkind
people were starting to call the boy
plunger or the boy traitor no one was
right that often they whispered no one
was that good this kid and his stupid
little notebook were screwing up their
profit margins basically Jesse pissed
off the casino so the bucket shops one
by one start to permanently ban Jesse
they won't take his money they won't
place his bets some places won't even
let him through the front door Jesse
became Persona nrata at every bucket
shop in New England but Jesse Livermore
was not one to admit defeat so easily
and in an attempt to outwit the bucket
shops he uh gets creative as one
historian writes quote he dawned a
number of disguises among which included
fake beards oversized coats wide brimmed
hats that shielded part of his face and
so on before entering the shops and he
provided clerks with various aliases
unfortunately the clerks cottoned onto
his real identity almost every time
whereupon he was promptly booted from
the premises end quote for Jesse it was
heartbreaking just when he'd found his
life's calling just when he'd found
something he was was really really good
at it had all dried up in front of his
eyes I mean what was he going to do now
go back to the farm become just like his
dad or toil away day after day after day
in his monotonous 9 to5 Jesse Livermore
wasn't scared of much but the thing that
terrified him more than anything else
was a life of mediocrity but as they say
when life closes a door it opens a
window as Livermore reflected decades
later quote if it hadn't been for the
bucket shops refusing to take my
business I never would have stopped
trading in them and then I never would
have learned that there was much more to
the game of stock speculation than to
play for fluctuations of a few points
end quote Jesse decided that he was
going to make big money real money and
the only place to do that he believed
was in New York City Jesse Livermore was
heading to Wall Street it was the year
1900 a new century had arrived and
Livermore was 22 years old so much had
changed since he'd left the corn farm at
the age of 14 he wasn't a boy anymore
but the world was changing too and it
was changing
[Music]
fast
before we get back to the show let's
take a second to pay the bills and talk
about one of our sponsors hellofresh
America's number one meal kit as they
say breakfast is the most important meal
of the day and hellofresh agrees right
now they are giving all subscribers free
breakfast for life that means you'll
enjoy a totally free breakfast item with
every single hellofresh delivery now to
be perfectly honest I am not what you'd
call an early riser bit of a night ow
myself but hellofresh breakfast is worth
waking up for I've realized in recent
years that I cannot survive on caffeine
alone so a nice bacon and cheddar EG
bite with my morning coffee really hits
the spot and sets me up for a productive
day it's just one more great reason to
subscribe to hellofresh each box is
packed with farm fresh ingredients and
everything arrives pre-portioned right
to your doorstep for less hassle and
less wasted food it's super easy I love
it and if you enjoy cooking but you want
to ditch the stress of meal planning
it's pretty much the perfect solution
and as always there is a deal that comes
with this plug right now go to
hellofresh /on dfree and use code
conflicted free for free breakfast for
life that's one breakfast item per box
while your subscription is active once
again that's free breakfast for life at
hellofresh.com conflicted free with code
conflicted free and now let's get back
to the
show it's the fall of 1923 we're in a
doctor's office in Berlin the capital of
Germany and for weeks a Str strange
baffling illness has been spreading
across the country as far as German
Physicians could tell it was some kind
of mental Affliction which would
suddenly seize people with no history of
psychological illness according to
financial historian lakat ahed quote
those Afflicted were apparently normal
in every respect except according to the
New York Times quote for a desire to
write endless rows of ciphers and engage
in computations more involved than the
most difficult problems and logarithms
perfect ly sensible people would say
that they were 10 billion years old or
had 40 trillion children apparently
cashiers bookkeepers and bankers were
particularly prone to this bizarre
disease the German doctors started
calling it Cipher stroke it was a vague
inadequate name but they didn't know
what else to call it one thing was clear
however anyone who had to regularly
calculate the rapidly falling value of
German currency was at a high risk of
developing Cipher stroke 5 years earlier
in 1918 Germany had Lost World War I the
Great War and when you lose a war that
has killed something like 20 million
people there are consequences in
particular Financial consequences when
the young men of Germany had marched off
to fight in a slurry of mud and viscera
on the French Frontier in 1914 they did
so with the iron conviction that as ahed
writes quote the war would be short that
the Reich would Prevail and that it
would then present the bill to the
vanquished end quote instead the
opposite happened the war dragged on for
four long years the Kaiser Was Defeated
and exiled and the principal Victors of
that war Great Britain France and the
United States flung a massive
insurmountable reparations bill at
Germany's feet with a sense of smug
satisfaction the artillery barrels had
barely cooled before the Allies began
drawing up a plan to make Germany pay
through the nose to as one British
newspaper put put it quote squeeze
Germany until the Pips squeak end quote
this was punishment pure and simple and
after many months of political wrangling
in Paris it was decided that Germany
would pay $33 billion in reparations for
their role in The Great War it was money
that they did not have in an attempt to
keep Pace with the bottomless appetites
of their own War Machine Germany had
begged borrowed and inflated its
currency to stay in the fight so when
the bill came due all Germany had in its
Pockets was 2 million dead men and some
clumps of lint the consequences were
catastrophic for Germany's economy the
wartime inflation combined with the
Staggering reparations Bill and a
post-war treasury that printed money
like ski ball tickets essentially made
Germany's currency the mark worthless it
was as one historian colorfully put it
quote a voyage of fantasy into the outer
Realms of the monetary universe end
quote before World War I a German Mark
was worth about 25 cents so a quarter of
a US dollar by 1923 according to one
publication quote 42 billion marks was
worth 1 American Cent end quote as Ahmed
writes quote basic necessities were now
priced in the billions a kilo of butter
cost 250 billion a kilo of bacon 180
billion a simple ride on a Berlin street
car which had cost one Mark before the
war was Now set at 15 billion it became
meaningless to talk about the price of
anything because the numbers changed so
fast economic existence became a race
workers once paid weekly were now paid
daily with large stacks of notes every
morning big trucks loaded with laundry
baskets full of notes rolled out of the
reiches bank printing offices and drove
from Factory to factory where someone
would clamber a board to pitch great
bundles to the stolen crowds of workers
who would then be given half an hour to
rush off and buy something before the
money became worthless and ahed goes on
in a later chapter quote those with
money desperate to be rid of it before
it became worthless indulged in giddy
frenzies of spending while those without
sold what few possessions remained to
them including their bodies in the
struggle to survive end quote it was no
wonder people started wandering into
doctor's offices with Cipher stroke
scribbling computations and equations
because the Basic Value of Money the
basic meaning of numbers themselves had
become so unstable were you 40 years old
or 40 2 billion did you get married 3
years ago or 100 million it was a very
dark time for Germany with darker times
still ahead as we all know as the writer
Stefan schag remembered quote how Wild
anarchic and unreal were those years
years in which with the dwindling value
of money all other values in Austria and
Germany began to slip it was an Epoch of
high ecstasy and ugly scheming a
singular mixture of unrest and
fanaticism end quote but across the
Atlantic a very very different mood was
in the air in America the mid to late
1920s was the wildest RI roaring party
of all parties World War I had
transformed America's fortunes too but
while Germany was suffering through
apocalyptic inflation and social
instability America was experiencing the
greatest windfall in its history as
historian Scott Nations puts it for
American industrialist quote it became
nearly impossible to not make money
during the War years end quote before
World War I the city of London had been
the center of the financial universe but
all that changed with the guns of August
in 1914 as liakat ahed explains in his
book Lords of Finance quote to pay for
the four long destructive years just
passed every country in Europe had tried
to borrow as much as it could from
wherever it could the effect was to
create a seismic shift in the flow of
capital around the the world both
Britain and France were forced to
liquidate a huge proportion of their
Holdings abroad to pay for essential
Imports of raw materials and both
eventually resorted to large-scale
borrowing from the United States by the
end of the war the European Allied
Powers 16 countries in all owed the
United States about 12 billion of which
a little under 5 billion was due from
Britain and 4 billion from France end
quote gold flowed out of Europe across
the Atlantic into New York City banks in
what our old friend Jesse Livermore
called quote a colossal suction pump any
money that Germany could scr up for
reparations went to Great Britain and
France who in turn tried to pay back
their debts to the us as Europe got
poorer America got richer when a
suggestion was made to President Calvin
kulage that the US forgive the war debts
owed by their allies he scoffed quote
they borrowed the money didn't they they
need to repay it end quote the sun was
finally setting on the British Empire
and in its place the United States was
basking in the glow of Newfound
relevance it was a good time to be an
American but the good times weren't
happening just because of a change in
the status quo of international banking
a massive wave of technological
innovation was happening in the US one
that would revolutionize the basic
fabric of American life forever it was a
change that was clearly evident to a man
named Nate Shaw Nate Shaw was a black
sharecropper from Alabama he couldn't
read and he could Couldn't Write his
father had been a slave but in 1926 Nate
Shaw bought his very first car a Ford
Model T with cash and he didn't buy it
as a crucial need for his life or
business it was a Leisure purchase as
Nate remembered telling his buddies
quote I told him yeah I'm thinking of
buying me a car going to get me a new
Ford I'm thinking about it I haven't
done it yet but that's my thorough aim
my boys anyway they got big enough to go
and correspond with girls and I think
I'll just buy me a new Ford to please
them end quote the fact that the
illiterate son of a slave living in the
Deep South could afford a brand new car
just for fun was not only striking
evidence of the wave of prosperity
America was experiencing in the 20s it
was exactly what Henry Ford had dreamed
of when he first conceived of the Model
T quote I will build a motor car for the
great multitude it will be large enough
for the family but small enough for the
individual to run and care for it will
be constructed of the best material by
the best men to be be hired after the
simplest designs that modern engineering
can devise but it will be so low in
price that no man making a good salary
will be unable to own one and to enjoy
with his family the blessing of hours of
pleasure in God's Great Open Spaces end
quote these days obviously you can throw
a rock in any direction and hit a car
but we tend to take that ubiquity for
granted I mean the automobile completely
changed American life it connected
communities in unprecedented ways people
who had never left left their Hometown
were now able to travel hundreds of
miles at a whim across entire States in
a single day that in turn drove
infrastructure development roads
highways Bridges and that in turn
created more jobs which provided the
wages to pay for more cars and on and on
and on but crucially for our story at
least the rise of the automobile also
introduced many Americans to the notion
of buying things on credit it was a
transformative concept being able to buy
something you wanted now and pay for it
later over the course of small
installments and at the height of the
Roaring 20s there were so so many things
to buy it was a time of breathless
technological innovation in consumer
goods as historian Charles R Morris
writes quote Big Ticket items like cars
and Furniture led the parade but there
were easy payment plans for posos radios
phonographs vacuum cleaners and even
impulse items like jewelry and clothing
which by themselves accounted for half
the total borrowing measured by its
economic impact the evolution of
consumer credit was nearly as portentous
as the light bulb or the internal
combustion end quote it was as one
historian writes quote the world's first
consumer Paradise end quote yes change
was in the air literally in fact across
the airwaves the recent invention of
radio was bringing a dizzying flow of
information entertainment and
advertising into American Homes way back
in 1865 an editorial in the Boston Post
had made a prediction about the future
of the then embryonic radio quote
well-informed people know that it is
impossible to transmit the voice over
wires and that were it possible to do so
the thing would be of no practical value
end quote a Scottish mathematici named
William Thompson went on to put it a bit
more bluntly in
1897 radio has no future end quote and
boy oh boy were they Wrong by the early
1920s radio technology had really come
into its own and Americans were buying
radio sets in droves it was now possible
to hear your local mayor your Governor
even the president himself speak
directly to you in your home but that
was just the tip of the iceberg
Americans could listen to the orchestra
band performances boxing matches dramas
soaps and comedy skits Mass
entertainment of every Form and Function
was percolating into households from
coast to coast across the Atlantic in
post-war Germany formerly middleclass
families were being driven to
prostitution and crime just to make the
rent but in America Pleasant Sunday
drives with the wife and kids became a
cultural Main and nowhere was the sense
of Blue Sky optimism and boundless
Prosperity stronger than in New York
City if America was a party New York was
the VIP room and Wall Street was the DJ
booth setting the tone for it all as
Charles R Morris writes the city was
quote swimming in money Global monetary
Rivers had rechan to run through New
York the deepening sediments of gold
dust provided the Loose Change to pay
for great advances in broadcasting and
Publishing in advertising and popular
entertainment in Couture in culture and
the Arts and finally for the decades
great building boom that established
skyscraper Art Deco as the
characteristic New York City design
standard end quote as the 20s roared on
everything in New York seemed to be
going up skyscrapers Real Estate Value
even skirts by this point flapper
fashion had taken hold in the form of
boyish bob hair cuts and revealing skin
thin party dresses as Morris writes
quote a business newspaper calculated
that in 1928 that since the war the
material required for a woman's clothing
had dropped from 19 and a/4 yards to
only seven end quote that skimpy new
style even radiated out into small town
America as one mother from Muny Indiana
said quote the dresses girls wear to
school now used to be considered party
dresses end quote it was boom time in
America baby and with within this
cultural context in a country a wash in
excitement prosperity and positivity the
American public first became acquainted
with a seductive new mode of wealth
creation the one the only stock market a
toxic self-destructive love affair was
about to
[Music]
begin
[Music]
I'm moaca and I'm excited to announce
season four of my podcast mobituaries
I've got a whole new bunch of stories to
share with you about the most
fascinating people and things who are no
longer with us from famous figures who
died on the very very same day to the
things I wish would die like buffets all
that and much more listen to mobituaries
with moaca wherever you get your
podcasts it's the spring of
1929 we're in Flint Michigan and a
34-year-old mailman named Homer dowy is
making deliveries along his daily route
Homer had been a mailman for about 4
years and in that job he made 60 cents
an hour for an annual salary of
$2,100 it wasn't the most flashy job but
it was stable free from the threat of
unexpected layoffs as Homer assured his
wife quote it's a permanent job
everybody else can get laid off but they
still like to get letters end quote but
on that fine spring day in 1929 Homer
dowy had more than just letters in his
mailbag he noticed that it was stuffed
with distinctive manila envelopes and as
he went to drop off one of those
envelopes to a particular house he
noticed that a woman was waiting outside
the front door for him Homer was right
everybody liked to get letters but this
woman was chomping at the bit to receive
her mail that day she was hopping around
like a kid on Christmas morning when
Homer handed her a manila envelope with
her name on it she quote ripped open the
envelope in front of me and then danced
up and down with excitement she
explained to Homer that she had just
quote made a killing in General Motors
end quote the envelopes all of them
contained checks from brokerage houses
profits from the stock Market making
their way from Wall Street to Flint
Michigan and as time went on Homer
noticed more and more manila envelopes
for people on his route it seemed to him
that quote a lot of Flint folk were
winning in the market end quote and they
most definitely were for almost seven
incredible Years starting around 1923
the stock market had seen an
astronomical rise in share prices
everywhere Homer looked it seemed like
people were getting rich it was easy
they said to not play the stock stock
market was like leaving stacks of money
on the table and although the fomo was
strong Homer resisted the urge to join
the party the financial sorcery
practiced on Wall Street seemed vague
and risky and Shady to him Homer was a
traditional guy very conservative the
best way to make money was honest pay
for honest work and he believed that the
safest place for his money to be was at
the local bank not in stocks but very
few people shared Homer's hesitation
about the stock market in the spring of
192 29 a decade earlier the concept of
investing in anything much less the
stock market was a strange and
mysterious notion to the American public
but all that changed when the United
States entered World War I in 1917 on
behalf of the Allies to finance a rapid
military buildup the government needed
to raise loads of quick cash so they
started issuing something called Liberty
Bonds a bond basically is a contract
with your government when you buy a bond
you're essentially loaning your
government a small amount of money in
the short term and then if you're
patient they will pay you back a
slightly larger amount after 10 20 30
years it's one of the safest Investments
you can make because it's backed by the
inherent stability of a government well
during World War I the US government
marketed liberty bonds to the American
public as a win-win type of product not
only are you supporting the war effort
like a good Patriot you also get a small
profit from your investment in the form
of Interest down the road the Liberty
Bond introduced the fundamental concept
of investing to millions of Americans it
was the first investment many people
ever made and around the same time of
course Americans were introduced in Mass
to another concept that we've already
talked about credit pay as you go buying
stuff with borrowed money people bought
cars Furniture refrigerators radio sets
jewelry even Cosmetics on credit a
little money down and some interest
along the way and you can have whatever
you want instantly it's a lending system
that still drives the engine of our
economy today well right around the mid
1920s these two concepts investing and
credit met got drunk hooked up and had a
baby from Hell allow me to explain if
Homer dowy had ever gotten tired of his
60 cents an hour job and decided to make
some real money on the stock market he
would have gone down to one of the local
brokerage offices in Flint and once
there he would have been presented with
an amazing opportunity Homer homie homes
my guy a slick broker would have said
for just a little money down you can
make an obscene profit well how do I do
that the humble mailman might have
replied and the stock broker would have
proceeded to blow his mind he would have
explained to Homer the magic of buying
on margin buying on margin essentially
means that you do not have to pay for a
share of a stock in full to enjoy the
potential upside of it so to keep things
simple imagine you want to buy one share
of General Motors stock priced at $50 a
share well in 1929 50 bucks is a lot of
money for the average person I mean for
Homer that's more than a week's wages
his wife will kill him if he gambles 50
bucks on the stock market not a problem
says the broker you don't need $50 I
only need 10% from you today or $5 I'll
just loan you the other 90% that loan
that's called your margin so buying on
margin well that's interesting Homer
thinks go on he says to the stock broker
the salesman's eyes glitter and shine
and he proceeds to tell the mailman more
now imagine General Motor stock goes up
which it will everything's going up
these days imagine if it goes up to $55
a share or 60 or Hell $70 a share you've
still only paid $5 down the rest you are
borrowing from the bank with a little
interest as the stock rises in value
it's paying off your loan if you decide
to cash out and take profits at 70 I
keep the chunk of the loan you haven't
paid off yet but you still make the
profit from the Stock's rise which in
this scenario is 20 bucks so think about
it Homer you've just turned $5 into $20
by doing nothing and the more money you
put down the more of these effects will
be compounded the magic of margin well
what happens if the stock goes down the
cautious and conservative Homer might
have asked at this point the stock
broker would have had to suppress a
laugh what a simple rube nothing goes
down in this market we're in the middle
of the most gravity F Bull Run in
history but he humors the misinformed
mailman well he would say if the price
of GM stock goes down below the price
you initially bought it at the value of
your down payment shrinks with it
proportionally which means you will need
to pay more money to maintain the
requirements of your loan if you can't
cover it I will take your stock away
from you and sell it to somebody else
who can pay you will lose your entire $5
investment in fact you might owe me a
little money and interest for giving you
the loan in the first first place the
entire system was a very sharp
double-edged sword as historian Michael
Pino summarized quote margin magnified
the stock buyer gains a 10% rise in
price would give the investor a 100%
return of course a 10% decline would
wipe the investor out end quote but at
this time trying to explain the
potential downside of margin buying was
like explaining the potential downside
of a foot massage I mean what could go
wrong the market was only going one way
up every expert every banker and
politician and broker from Muny to
Manhattan believed the stock market
would continue to sore How could an
average Joe not trust the people who
knew this stuff backwards and forwards
Homer dowy the mailman from Flint
Michigan never went into any brokerage
firm and he never bought any stock but
millions of Americans heard that deeply
seductive sales pitch and said you know
what here's $500 put me down for 50
shares of GM or RCA or us Steel I mean I
can make a year salary in a few good
weeks on the market let's see how fast
and far this gravy train can roll now
many banks and brokerages required
slightly higher deposits 20 30% but the
result was the same millions of
overleveraged firsttime investors buying
huge sums of stock on borrowed money if
they had asked our friend Jesse
Livermore what he thought about all that
he would have pulled a drag on his
handrolled Cuban and told them in a
thick Boston accent that they were
stupid sons of these smalltime
investors were minnow as Jesse called
them people who knew nothing about these
companies nothing about how this all
worked who just blindly handed over
their life savings on the fairy tale
Promises of a stock salesman they were
setting themselves up for a lot of pain
as Livermore said years after the crash
quote people who look for Easy Money
invariably pay for the privilege of
proving conclusively that it cannot be
found on this earth end quote making
money on the stock market was not is not
easy it required discipline intelligence
and good oldfashioned gut instincts
Jesse Livermore had all three since he'd
ran away from the corn farm in 1891 with
five bucks in his pocket the boy Trader
had been on quite the Wild Ride banned
from every bucket shop in New England
Jesse arrived on Wall Street with the
ambition of an emperor in the face of a
12-year-old but trading with the big
guys was not like scraping up Penny
profits in the bucket shops the aspiring
20-some day trader experienced a very
steep learning curve as he remembered
years later quote the game taught me the
game and it didn't spare me the rod
while teaching end quote over the course
of the next decade or so Jesse
livermore's net worth was like a golden
elevator it would go up and up and up
but then he would accidentally push a
wrong button and it would drop like a
rock but then he'd have a great idea a
great trade a great gut instinct and the
elevator would climb Skyward once again
when World War I ended in 1918 Jesse was
for 41 years old and he had been a
multi-millionaire multiple times he'd
gone bankrupt twice he'd been in debt
he'd owned yachts and cars and mansions
and then had to sell it all to cover his
losses then when he was back up he'd buy
it all back all over again now to most
people that sounds like a hellish ordeal
of stress and uncertainty but Jesse
loved every single minute of it Jesse
Livermore didn't care about security or
stability he lived for that Adrenaline
Rush the highs the lows the White
Knuckle roller coaster that only Wall
Street can provide anything to avoid the
Fate that he considered worse than death
a life of mediocrity of boredom the life
of a corn Farmer's son the one modum of
stability Jesse did allow into his life
was marriage to a young woman named
Dorothy fox went she was according to
one historian a quote Brooklyn Born
Beauty who had glossy Auburn curls
bottle green eyes a candy red pout and a
lovely hourglass figure end quote she
was half his age and full-on gorgeous
perfect wife material a mutual friend
said Jesse had been married once before
but that Union had collapsed faster than
a poorly timed investment this time
though Livermore assured himself this
was for real less than a month after the
guns fell silent on the Western Front in
France in 1918 Wedding Bells were
ringing at the St reges hotel as Dorothy
or dosy as Jesse called her became Mrs
Jesse Livermore engraved onto the ring
that he slipped on her finger that day
was the phrase dosi forever and ever she
called him JL Jesse loved dosi for a lot
of reasons at only 22 years old again
about half his age she was a knockout
she was fun she had a vivacious
firecracker personality that could light
up any cocktail party in New York and
Jesse took his Auburn haired trophy all
over the world they went yachting in
Europe summering in Palm Beach she was
the jewel in his crown but as we have
seen Jesse was not the kind of person to
ever be satisfied with what he had his
intelligence and ambition combined with
an almost self-defeating love of risk
and excitement soon drove a wedge
between he and his young wife Jesse
Livermore loved three things making
money on the stock market having sex
with beautiful women and spending time
with his new wife dosi in that order the
only thing that could rival Jesse's
appetite for Success on the stock market
was his appetite for women new women
strange women exciting women he would
cruise around New York in his yellow
Rolls-Royce hopping from party to party
until he found a Flopper that struck his
fancy he'd whisk them away to one of his
secret love nests around the city while
dosy waited at their Fifth Avenue
apartment for a husband who was not
coming home that night the next day
Jesse would just do it all over again
wham bam rinse and repeat as one
contemporary wrote quote when Livermore
is speculating he is thinking of
screwing and when he is screwing he is
thinking of speculating end quote well
it wasn't long before dosy found out
about Jesse's infidelity as Gordon
Thomas and Max Morgan witz write quote a
proud and possessive woman she loved her
husband deeply and the thought that he
found sexual Solace elsewhere was a
cruel blow one that she could not cope
with she would never have understood
that livermore's complex personality
required him to regularly pursue his
sexual padillos outside the marriage bed
he had a roving eye a fat wallet and he
did not see why marriage should hamper
his freedom end quote dosi confronted
Jesse about his side pieces constantly
but he would just take a puff on his
cubin run a hand through his ash blonde
hair and blow her off he didn't think
that he was doing anything wrong or at
least not enough to stop Jesse's
cheating took a heavy toll and dosi
eventually found comfort in one of the
few things that she could control
alcohol dosi drank and drank and drank
what began as a coping mechanism
eventually mutated into a crippling
addiction by the mid 1920s Jesse and
dosy Livermore were trapped in a
marriage where the addictions of one
partner drove the other deeper into
their own she drank because he cheated
and he continued to cheat because she
drank but Jesse and dosy Livermore were
not the only ones losing control as the
20s roared on by 1927 the American
public's timid flirtation with the stock
market was well on its way to becoming a
hot and heavy Affair from Chicago to
Miami to Atlantic City brokerages and
Banks sold tens of millions of stocks on
margin to firsttime investors who
desperately wanted a piece of the action
President Calvin kulage who usually
didn't say much had famously proclaimed
in 1925 that quote the business of
America is business end quote and
business was most definitely booming the
American economy seemed Unstoppable gold
was flowing in from Europe interest
rates were low people were buying buying
buying and the banks were lending
lending lending big companies like
General Electric AT&T General Motors and
US steel were going up and up picking a
winning stock started to seem as easy as
closing your eyes and throwing a dart at
the Blackboard big Bankers like JP
Morgan Jr and day trading Pirates Like
Jesse Livermore became celebrities in
their own right people looked at
successful financiers stock Brokers and
investors like we might look at actors
or musicians today they were the rock
stars the Titans the folk Heroes of the
American dream something to emulate and
aspire to they had made their fortunes
on Wall Street why couldn't a housewife
from Yonkers or a bellhop from Detroit
and the soundtrack to This growing
Obsession was the constant ticking of a
little device called the Western Union
stock ticker now today in modern times
we can track the fluctuations of stock
prices in microseconds but back in the
1920s how were you supposed to follow
and monitor the minute-to-minute change
changes in the stock market did they
publish every Company's stock price in
the paper or announce them on the radio
well sometimes yeah but that wasn't fast
enough every brokerage office every Bank
every post office even barber shops had
something called a stock ticker now odds
are you have heard that phrase before
but what exactly is a stock ticker well
essentially it's a printer imagine an
oversized snow globe or a glass
container with a solid base kind of like
the one that holds the magic row and
Beauty in the Beast now imagine that
within that glass is an intricate brass
machine with axles cogs and wheels all
attached to a thin spool of paper this
long coil of paper constantly printing
would twist like a snake skin into a
waist basket positioned below the ticker
now it all sounds very quaint today but
the psychological effect of the stock
ticker was profound remember this was an
ERA where almost all important
information is transmitted on a delay if
something big happens a fire a riot a
rally an election result whatever you
have to wait to read about it in the
paper the next day or wait until the
radio can broadcast a report about it
but the stock tickers were different
they were spitting out information
almost instantaneously Telegraph
operators and the New York Stock
Exchange would spend every minute of
every trading day updating the prices as
fast as humanly possible and relaying
them to every corner of the country
essentially It's A Primitive version of
a scrolling feed the ticker never stops
ticking it never stops updating and much
like we are glued to our phone screens
in the 21st century anxiously awaiting
the next like the next comment the next
quick hit of dopamine Americans in the
1920s were glued to the stock ticker
waiting to see how their Investments
were performing it was constant
NeverEnding instantaneous information
look away for a second and you might
miss something big but the tendrils of
the ticker weren't confined to the
shores of the USA either those signals
went out to Warsaw and Shanghai
Vancouver and Lisbon anywhere in the
world where people were buying and
selling stock a ticker was somewhere
close by spitting out yards upon yards
of paper every day the stock ticker was
the heartbeat the pulse of the
international economy and as the 1920s
hurdled towards its close that pulse was
quickening as one Italian newspaper
wrote quote with more Authority than the
League of Nations with more subtlety
than bolshevism another world power is
making a direct appeal to the strongest
Instinct of human nature the new power
is Wall
[Music]
[Music]
Street it's the summer of 1929 we're in
in New York City in a studio office
above Carnegie Hall outside the door
dozens of people are crammed into a
waiting room as the sound of stock
tickers were and rattle in the
background to pass the time they're
talking and shattering reading the Wall
Street Journal or other financial
publications and many of these people
have been waiting for hours but they
were all assured that their brief
consultation with the person behind the
door would be well worth the wait inside
the studio calling in clients one by one
was a 61-year-old woman named Evangeline
Adams Evangeline Adams was the most
famous fortune teller in America now
when we picture fortune tellers we tend
to think of long-haired witch in the
woods types dressed in flowing robes and
wearing Ault talismans but Evangeline
Adams looked more like an attorney or a
psychiatrist than a fortune teller her
wavy brown hair was cut short she wore a
plain black suit with strands of pearls
coiled high around her neck and when you
sat down across from her she would peer
at rat you over the rims of oval
spectacles and then run a wrinkled hand
across her literal crystal ball most
people who visited evangelene Adams in
her Studio above Carnegie Hall didn't do
so to contact dead loved ones or find
out when they were going to die most
people went to evangelene Adams for
advice on how to play the stock market
as Gordon Thomas and Max Morgan witz
write quote since 1927 coinciding with
an upsurge in the market evangelene had
concentrated on predicting its future it
had made her even richer even more
sought after 4,000 people a day wrote to
her at $20 a reading she claimed to
predict how the Dow Jones index in the
New York Times Industrial Averages would
behave her clients numbered some of the
most famous in the Land movie Queen Mary
Pickford always consulted Evangeline
before investing steel tycoon Charles
Schwab was said to base his buy and sell
orders largely on her predictions for
those who could not visit her Studios
above Carnegie Hall Evangeline produced
a monthly newsletter expl explaining how
the changing position of the planets
would affect stocks and shares over
100,000 people paid 50 cents each for
these forecasts advertised as quote a
guaranteed system to beat Wall Street
end quote The Seer of Wall Street as she
was later called red palms and consulted
the heavens a big part of her appeal was
that she seemed to be able to predict
events before they happened with
unnerving accuracy she had successfully
foreseen stock market upswings and
breaks Hotel fires and natural disasters
she had predicted the exact flight time
of Charles lindberg's famous
transatlantic voyage and was only off by
about 22 minutes she'd once in toned
about a terrible earthquake that would
level Tokyo and in 1923 it did and in
one especially creepy flourish she had
even supposedly foreseen her own death
which she firmly believed would come in
1932 but that was three long years away
and in the meantime Miss evangelene
Adams didn't prophesize for free once in
a restaurant a waiter had asked her for
a quick stock tip she coldly replied
quote you do not work for nothing why
expect me to end quote as her subscriber
list swelled and her Fame grew
evangelene Adams became a go-to resource
for investors in search of stock market
riches and whatever dark arts evangelene
had up her sleeve they were heralding a
very bright future asked what she
thought the remainder of 1929 held for
investors she CED quote the Dow Jones
could clim to Heaven end quote and
everything seemed to indicate that she
was right since 1924 the Dow Jones
Industrial Average had risen by
300% General Motor stock was worth 20
times what it had been a few years
earlier RCA radio Corporation of America
was worth 70 times would it had been
worth a few years earlier conventional
wisdom at the time dictated that to
paraphrase historian Mory Klein a stock
should sell at no more than 10 times
earnings but now the the Bulls were
saying that 15 times earnings was a more
apt figure for Modern Times And now few
speculators blinked at stock selling as
high as 30 times earnings there were
occasional dips and downturns in the
market of course but nothing significant
nothing that lasted long enough to cause
any serious concern as one Boston
Investment Trust cheerfully told its
clients quote temporary breaks come
indentions in the ever ascending curve
of American Prosperity end quote and
everybody was getting in on the action
as a stock Speculator named Bernard
baroo remembered quote taxi drivers told
you what to buy the shoe shine boy could
give you a summary of the day's
financial news as he worked with Rag and
polish an old beggar who regularly
patrolled the street in front of my
office now gave me tips my cook had a
brokerage account end quote as Mory
kleene writes quote no longer was the
stock market merely the playground of
the rich the ambitious and the
Professionals for the first time it
seemed as if anybody could play the wall
Street lottery in the hope of quick
effortless riches end quote one
professional stock Trader joked that
quote maybe the exchange should be moved
to Yankey Stadium end quote celebrities
like comedian grouo Marx leapt head
first into the market too grouo invested
almost every penny he earned in stocks
and enjoyed month after month of
handsome returns as he told a
newspaperman One Day quote what an easy
racket stock went up seven points since
this morning I just made myself
$7,000 end quote historian liakat ahed
explains the scope of the phenomenon
quote by 1929 anywhere from 2 to 3
million households one out of every 10
in the country had money invested in and
were engaged with the market trading
stocks had become more than a national
Pastime it had become a national
Obsession end quote a British journalist
named Claude cockburn who visited
America at the time agreed writing quote
you could talk about Prohibition or
Hemingway or air conditioning or music
or horses but in the end you had to talk
about the stock market and that was when
the conversation became serious anyone
trying to throw doubt on the reality of
this Promised Land found himself being
attacked as if he had blasphemed about a
religious Faith or love of country end
quote and nothing encapsulated the mood
of the times quite like an article that
appeared in Ladies Home Journal in
August of 1929 entitled everybody ought
to be rich in it the famous businessman
John J rasop told the American public
that the secret to wealth and security
could be found in the stock market his
argument summarized by one historian was
that quote $15 a month wisely invested
would make them wealthy within 20 years
except perhaps that 20 years was a long
time to wait end quote what raskob
failed to mention was that this easy
path to wealth was built on the
assumption that the market would never
fall or correct for the next two decades
there were some naysayers on the fringes
of the speculative orgy of course
financially comfortable Senators like
Tom hefin of Alabama Tut tutted from the
sidelines quote Wall Street has become
the most notorious gambling Center in
the whole universe the hot bed and
breeding place of the worst form of
gambling that ever cursed the country
end quote Harper's magazine cautioned
that Wall Street was no place for
amateurs reporting that the market was
quote becoming a Children's Crusade not
an adventure for a few hard boned nights
a place for the Butcher and The Barber
and the Candlestick maker but opinions
like that were in the minority most felt
that America was on the cusp of a new
era of unprecedented Prosperity it
wasn't gambling to bet big on the bright
future of America as the New York Daily
Mirror wrote that same year quote the
prevailing bull market is just America's
bet that she won't stop expanding that
big Ideas aren't petering out that
ambition isn't tiring in the wings that
tomorrow is twitching with growth pains
graph hounds chart waivers and statistic
quoters May shout their pins horse with
contrary sentiment Financial Jeremiah
May Rave of days of Doom but these
minority reports are drowned by the
harion ticker tape and the swish of
skyrocketing Securities we are gambling
on continued Prosperity Full Employment
and undiminished spending capacity on
freight loadings automobile output radio
expansion on Aviation development crop
yields beef prices on small order sales
and sound retailing end quote anybody
with lingering doubts just had to listen
to The Sunny Proclamation of recently
elected president Herbert Hoover
privately the president was very
concerned about the stock markets
astronomical and in some ways
nonsensical rise but on the campaign
Trail in 1928 he had assured voters that
quote we in America today are nearer to
the final triumph over poverty than ever
before in the history of any land the
poor house is Vanishing from among us we
shall soon with the help of God be in
the sight of the day when poverty will
be banished from this earth end quote
even pop culture reflected the
effervescent exuberance of the times the
number one hit song of 1929 was entitled
blue skies the lyrics of which were
quote blue skies smiling at me nothing
but blue skies do I see bluebirds
singing a song nothing but bluebirds all
day long never saw the sun shining so
bright never saw things going so right
noticing the days hurrying by when
you're in love my how they fly but while
most Americans saw blue skies ahead said
there were a few who sensed dark clouds
on the horizon in the late summer of
1929 Jesse Livermore was 52 years old
the farmer's son who had made his name
on Wall Street as the boy traitor had
not been a boy for a very long time age
had accentuated his weak chin and dled
his eyes forcing him to adopt thick
round glasses his strawberry blonde hair
had faded to a receding yellow even
Jesse's unquenchable womanizing was on
the way his Rocky marriage to dosi had
been Li limping along for 10 years but
it was on life support and in an effort
to save it they had both agreed to stop
indulging in their respective addictions
cold turkey Jesse promised he would stop
cheating and dosi promised she would
stop drinking despite all their problems
they did love each other and they were
tired of hurting one another and this
was a last ditch attempt to salvage
their marriage from an inevitable
implosion so Jesse came home every night
like a model husband and the two played
house as best they could trying to
suppress the thoughts creeped into their
minds as they went to bed Dotsy dreaming
of the whiskey bottle hidden in the
pantry and Jesse fantasizing about the
names in his little black book for the
sake of their marriage and their two
kids they would try their best to make
it work but there were other things
racing through Jesse livermore's mind
that summer the stock market's
spectacular run had made rich men like
Jesse even richer just like his early
days at the Boston Brokerage he had
impeccable timing and a spidey sense for
which stocks would dip which would climb
and when they would do do it and now
that spidey sense was telling him that
something was seriously wrong with the
stock market he couldn't quite put his
finger on it but he had a hunch
something very very bad could happen
with this seemingly Unstoppable market
and it might happen very soon it was in
his words quote a jigsaw which did not
have all the pieces end quote but unlike
the famous fortune teller of angelene
Adams Jesse Livermore didn't rely on
crystal balls and tarot cards the next
morning he hopped in his yellow
Rolls-Royce and had his chauffeur take
him to his massive Command Center above
Fifth Avenue he walked past the doorman
and whisked up the elevator to the 18th
floor and it was already buzzing with
activity his staff of 60 Traders
statisticians analyst and typist all
handpicked by Livermore were hard at
work livermore's investigation into the
health of the market had begun months
earlier in the spring and his staff was
very much up to the task as biographer
Tom Ruban writes quote his research team
team was vastly Superior to that of the
US government or even that of JP Morgan
Livermore led the team personally and
knew that his information was better
than almost anyone else's in America end
quote as they aggregated more and more
data and research it became clear to
Livermore that a massive correction
maybe even a crash was on the horizon it
was just a matter of when and how bad
there were hints at this crash hiding
beneath the surface seemingly unrelated
events that converged like pieces of red
string towards Jesse's conclusion in
London a powerful British industrialist
had just been arrested for criminal
fraud American Real Estate development
and steel production had not risen at
all in the previous month the bank of
England was bleeding its gold reserves
dry American Automobile production was
down in a booming economy which was
extremely odd plus the stock market was
filled with millions of inexperienced
investors minnow who were investing
blindly on borrowed money as Jesse
observed OB ered quote a get-rich quick
scheme is being played at an
increasingly Breakneck speed Across
America it is a new national sport that
can be played for the price of an
evening paper end quote all of these
factors coalesced in Jesse livermore's
mind he could see it just like he could
see the patterns in the prices as a
14-year-old kid going from bucket shop
to bucket shop with his trusty notebook
events were at a decisive stage he said
something big was clearly coming and
when it happened he was going to be
ready on September 2nd 1929 while Jesse
Livermore and his staff were hard at
work assembling the jigsaw pieces of the
coming catastrophe America was taking
the day off it was Labor Day with record
temperatures as high as 95° on the East
Coast the beaches were packed with
hundreds of thousands of people from The
Hamptons to Coney Island and because it
was a national holiday the New York
Stock Exchange and all its little
cousins across the country were closed
for the day the tickers were silent and
the market was strong wrong the Dow
Jones Industrial Average was one day
away from a record high of
381.986
the record high had been 98 just as the
fortune teller evangelene Adams had
foreseen in her crystal ball the Dow
Jones had indeed climbed to heaven but
what no one in America or the rest of
the world knew not Jesse Livermore or
evangelene Adams not Herbert Hoover or
Homer the mailman was that while the
Labor Day weather was setting records
the stock market had two the Dow Jones
had just hit its peak this was the top
in the coming months the Roaring 20s
would finally boil over and send the Dow
Jones plummeting down and down and down
until it reached a rock bottom of
41.22 in 1932 for those doing the math
at home that is 89% of its value gone
and the stock market would not reach the
highs of 1929 for another 21 years
September 3rd 1929 was the day the music
stopped and nobody knew it yet Wall
Street would keep dancing for another 6
weeks but in late October investors
watched in disbelief as their profits
evaporated their savings disappeared and
their world collapsed in a few short
years many of those happy labor day
beachgoers would be standing in lines at
a soup kitchen it was the beginning of
the
end well guys that is all we have time
for today I hope you enjoyed part one of
what will be a three-part series on the
crash of 1929 this first episode was
really about establishing the cultural
context of the crash and the mood of the
times and meeting a few of the key
players involved specifically Jesse
Livermore next episode Jesse will return
but we'll also be expanding our cast of
characters quite a bit we're going to
peel back wall Street's candy coating
and take a look at kind of the rot
underneath the bad behavior and
predatory practices that contributed to
the 1929 crash we're going to examine
the sickness in the system and along the
way we'll meet a venal Rogues gallery of
liars cheats swindlers and husters but
it would be disingenuous to suggest that
bad things only happen because of bad
people there were good intentioned
people in the story as well tragic
figures who tried to make the world
better and ended up breaking it instead
and we'll meet some of them too so with
all that said goodbye for now and look
out for that next episode in the next
few weeks but before I go a quick favor
if you enjoyed what you heard today
please consider taking a quick second to
give the show a five-star rating or just
like a nice review on Apple podcast or
Spotify and if you really enjoyed what
you heard today and you'd like to
support the show you can join the small
but loyal crew of patrons on the show's
patreon and you can find that at
patreon.com/crashcourse way of saying
thank you when I have some downtime and
the extra material and of course feel
free to drop me a line on social media I
love hearing from you guys and all your
thoughts about the show and you can find
conflicted on Facebook Twitter and
Instagram there is a Tik Tok too but I'm
still not very good at it so fair
warning any who that's all for me but as
always and I know I say this every time
but thank you so much for spending your
valuable time with me and I'll see you
next time this has been conflicted
thanks for
listening
[Music]
welcome to anthology of Heroes the
podcast that explores the most pivotal
moments of history Through The Eyes of
those who lived it in this podcast we
don't spend our time recounting facts
and dates instead we follow in the
footsteps of national heroes Kings or
Ordinary People who lived and breathed
the moments that shaped our world we're
not hemmed in by eras Borders or
religions instead we seek out the tales
of those who defied the odds and fought
passionately for their beliefs whether
they're right or wrong is up to you to
decide from verking G's doomed Rebellion
against Rome to Oola's unshakable war
against the USA all the way up to the
inspiring soie ball concentration camp
Uprising in World War II each episode is
an immersive listening experience
blending music and sound effects to
really draw you into the story our
episodes go for about 45 minutes making
them perfect for your commute and are
crafted using a wealth of historical
sources which I list on our website if
you want to learn more I'm the host
Elliot Gates and I'm thrilled to have
you joining me as we uncover history's
hidden gems and illuminate The Faded
pages of our past look out for the
anthology of Heroes podcast on Spotify
Apple music or anywhere else you get
your podcasts from