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0:27 jll.com slmp podcast hello and welcome
0:31 to conflicted the History Podcast where
0:33 we talk about the struggles that shaped
0:35 us the tough questions that they pose
0:37 and why we should care about any of it
0:39 conflicted is a member of the Evergreen
0:41 podcast Network and as always I'm your
0:43 host Zach Cornwell guys I am very
0:46 excited about today's episode it is
0:48 honestly a topic that I've had my eye on
0:50 for a while but because it's such a
0:52 sprawling and complex subject I'd been a
0:55 little nervous to really dive in and
0:57 tackle it but now seems like the right
0:59 time over the next few episodes we will
1:01 be examining one of the most notorious
1:04 events in American history arguably
1:06 world history during the course of one
1:09 week in October of 1929 $30 billion of
1:13 wealth vanished Into Thin Air what began
1:16 as a trimmer of panic in downtown New
1:18 York mutated into a financial shock wave
1:21 that rippled across the entire United
1:23 States and out into the wider world this
1:25 event destabilized the world economy it
1:28 impoverished entire generations and it
1:30 marked the beginning of the long
1:32 Collective trauma We Now call the Great
1:35 Depression one historian called this
1:37 event quote the most climactic financial
1:39 disaster in history another called it
1:42 quote the worst economic collapse in the
1:44 history of the modern industrial World
1:47 another said that quote few man-made
1:49 events short of the World Wars created
1:52 so much pain and bitterness and the fear
1:55 that it would occur again I am referring
1:58 of course to the stock market crash of
2:01 1929 sometimes it's called the Great
2:03 crash or the Wall Street crash of 1929
2:06 it's a story that most of us are vaguely
2:08 aware of at least on a surface level
2:10 when we hear phrases like Wall Street
2:12 and crash and 1920s we tend to picture
2:15 guys who look like the Monopoly man
2:16 leaping to their deaths from the top of
2:18 tall buildings men who in their ravenous
2:21 greed lost it all on the stock market
2:24 and faced with the petty humiliations of
2:26 poverty chose to end their lives men who
2:29 would rather die than be poor that
2:32 mental image however like a lot of Pop
2:34 history imprints is a misleading one the
2:37 story of the 1929 stock market crash is
2:40 much more than Bulls bears and suicidal
2:42 Brokers it's not about line graphs
2:44 spreadsheets or stock prices underneath
2:47 all those drab grainy Snippets of black
2:49 and white photography is a story
2:51 absolutely bursting with color it is a
2:54 rich human drama on an international
2:57 scale one that completely reshaped the
2:59 world and this financial disaster
3:01 represents a crucial fork in the road on
3:04 the path that led us to where we are
3:05 today but as important and Infamous as
3:08 the 1929 stock market crashes it is also
3:10 a source of intense controversy for many
3:13 many decades economists historians and
3:16 financial analysts have been performing
3:17 autopsies on the corpse of the Great
3:19 American bull market trying to explain
3:22 why exactly the crash happened and
3:25 everybody has a different Theory some
3:27 ideas are more widely accepted than
3:28 others of course but to this day there
3:30 is no universally accepted explanation
3:33 for what caused the most cataclysmic
3:35 financial disaster in history and that
3:37 underlying mystery is what we will
3:39 attempt to untangle over the course of
3:41 the next several episodes now at this
3:43 point you might be bracing yourself for
3:45 an avalanche of complicated Financial
3:47 jargon stock market lexicon and economic
3:50 Concepts Wall Street famously has its
3:53 own Byzantine and confusing language one
3:56 that people have dedicated their entire
3:57 lives to becoming fluent in and while we
3:59 we definitely will be Crossing that
4:01 language barrier to some extent this is
4:03 not going to be a vocabulary lesson I
4:05 promise this topic like every topic on
4:08 conflicted is fundamentally about people
4:11 and I wanted this series to be a human
4:13 history of the crash we will experience
4:16 this event not through bone dry numbers
4:19 or stats or stock market abstractions
4:22 but Through The Eyes of real Flesh and
4:24 Blood people that lived through this
4:26 thing good people and bad people and
4:28 everybody in between will meet
4:29 bootleggers and bankers career criminals
4:32 and crusading prosecutors we'll meet
4:34 swindlers charlatans and Sho shine boys
4:37 farmers and fortune tellers the truth is
4:40 the 1929 crash affected every strata of
4:43 American society and our cast of
4:45 characters will reflect that reality
4:47 this is a big story it is a clock with
4:50 many moving pieces and over the course
4:52 of the next three episodes we will
4:54 disassemble that Machinery pick it apart
4:56 and lay it all out in an attempt to
4:58 understand why the great crash happened
5:00 and most importantly to understand the
5:02 people that it happened to I am very
5:06 excited to share this story and these
5:07 characters with you so without further
5:09 Ado let's jump in welcome to the stock
5:12 market crash of
5:14 1929 part one to the
5:18 [Music]
5:28 Moon
5:32 [Music]
5:44 it's Tuesday October 29th
5:47 1929 we're in Manhattan on the floor of
5:50 the New York Stock Exchange and for
5:52 millions of people the world is ending
5:55 on a normal day the trading floor of the
5:57 New York Stock Exchange was a Prim
6:00 proper and orderly place a well- greased
6:02 machine in which men in fitted suits
6:05 bought and sold shares on behalf of
6:06 clients from as far away as London
6:08 Athens and Tokyo 2,000 employees clerks
6:12 analysts and telephone operators
6:14 scuttled and predestined paths along the
6:17 16,000 ft trading floor like so many
6:20 obedient bees and there was a lot of
6:22 honey in this Hive the stock market was
6:24 as historian Karen Blumenthal writes
6:26 quote the greatest Fountain of wealth in
6:29 the history of America end quote on a
6:32 normal day 3 million shares might change
6:34 hands in this room on a good day an
6:36 investor could watch the stock prices of
6:38 American companies climb up and up and
6:41 up in the past 6 months millions of
6:43 dollars had become billions of dollars
6:45 in a gravity and logic defining bull run
6:48 the likes of which no one had ever seen
6:50 it was what one contemporary called
6:52 quote a Magic Carpet Ride end quote but
6:56 Tuesday October 29th 1929 was not a good
7:00 or normal day on Black Tuesday as it
7:04 came to be known the New York Stock
7:05 Exchange looked more like a mosh pit
7:07 than a trading floor people are
7:09 screaming they are crying the stock
7:12 Brokers are having their fitted suits
7:14 ripped and shredded to Pieces by
7:16 desperate investors trying to sell their
7:17 stocks and fast the floor is covered
7:20 with an ankle deep layer of paper buy
7:22 orders sell orders ticker tape notes
7:25 scrap dead paper as thick as snow that
7:28 people are waiting through to get to a
7:30 broker who can sell their shares Outside
7:32 The Exchange 10,000 people have crowded
7:35 along Wall Street trying to squeeze
7:37 closer trying to understand what the
7:39 hell is happening and at this point in
7:41 the morning stock prices are falling
7:43 almost vertically like cans off a
7:45 supermarket shelf one Trader remembered
7:48 and it's happening so fast that by the
7:50 time the clerks can scribble the current
7:51 prices on the Blackboard they've already
7:53 fallen by another 5 10 20 points in the
7:56 first 30 minutes of the trading day two
7:59 billion dollar has evaporated life
8:02 savings pensions nest eggs rainy day
8:05 funds all gone like cotton candy
8:08 instantly dissolving in a puddle it's
8:09 just gone people are fainting on the
8:12 trading floor literally collapsing and
8:14 those that are conscious are getting
8:16 angry and inconsolable as Blumenthal
8:18 writes quote a middle-aged man with a
8:20 tear in his jacket broke out from the
8:22 crowd moaning I'm sold out I'm sold out
8:26 another man screaming at the top of his
8:27 lungs that he had been ruined grabbed a
8:29 messenger by the hair and lifted the
8:31 youngster off his feet the messenger
8:33 twisted and screamed but the man
8:35 wouldn't let him go finally the
8:37 youngster Broke Free and fled the
8:38 exchange crying leaving the yelling man
8:41 with a fist full of hair end quote there
8:44 is no other word for the mood then Panic
8:47 animal caught in a trap Panic as one
8:50 stock exchange employee named William
8:52 Crawford remembered quote they roared
8:54 like a lot of lions and tigers they
8:56 hollered and screamed they clawed at one
8:58 another's collars it was like a bunch of
9:00 crazy men end quote and what's worse the
9:03 Panic is spreading from its epicenter at
9:06 the New York Stock Exchange just down
9:08 the street at the famous Trinity Church
9:10 the pews are packed with people of every
9:12 faith and Creed Catholics Protestants
9:15 Jews even atheists all praying together
9:18 the church is flooded with frightened
9:19 despondent people seeking some sense any
9:22 sense of comfort all across America
9:25 banks large and small are filled with
9:26 angry customers demanding to withdraw
9:28 their money and all across America banks
9:30 are saying we can't we don't have your
9:33 money anymore by the time the closing
9:35 bell rang on Black Tuesday at 5:32 p.m.
9:40 16,383 700 shares had been sold at the
9:43 New York Stock Exchange representing a
9:46 loss of $10 billion in value in one day
9:50 as historians Gordon Thomas and Max
9:52 Morgan wits point out with sobering
9:54 Clarity quote that was twice the amount
9:57 of currency in circulation in the entire
10:00 country at the time end quote but in the
10:03 midst of all this fear and misery there
10:05 was at least one person making money in
10:08 New York that day making a fortune when
10:11 so many other people were losing
10:12 everything his name was Jesse list and
10:16 Livermore and he had seen this coming by
10:19 now you guys know the drill I usually
10:20 like to give a main character alert when
10:22 we meet someone super important and this
10:25 is your main character alert while Wall
10:28 Street was gripped in his area Jesse
10:30 Livermore was 7 m up town on the 18th
10:33 floor of a lavish office overlooking
10:35 Fifth Avenue and it was not an easy
10:37 place to gain access to as Thomas and
10:39 Morgan witz write quote the Livermore
10:41 Suite in the hex Shure building on Fifth
10:43 Avenue was protected at street level by
10:45 a doorman who denied its existence only
10:48 those whose names appeared on an
10:49 approved list were allowed past and then
10:52 they were whisked up by elevator to the
10:54 18th floor all visitors were there
10:56 further screened by a Burly Irishman
10:59 famed for his ham sized fists before
11:01 being allowed to enter the unnumbered
11:03 door of livermore's Citadel end quote
11:06 and if you were lucky enough to gain
11:08 access to Jesse livermore's office on
11:10 that Tuesday morning you would have seen
11:12 a slim 52-year-old man with a thinning
11:15 head of slick back blonde hair with his
11:17 sharp suit and weak chin he looked a
11:20 little bit like a very well-dressed
11:21 Turtle not that the rotating stable of
11:23 show girls and starlets he routinely
11:25 slept with cared another thing you would
11:27 have noticed about Jesse liver is that
11:29 he seemed perpetually suspended in a
11:31 roing haze of cigar smoke he was a chain
11:34 smoker but a chain smoker with very
11:36 expensive tastes every month he had over
11:39 300 handrolled cigars flown in directly
11:41 from Havana Cuba the best money could
11:44 buy and limore had plenty of that to
11:46 spare he was a self-made
11:48 multi-millionaire who delighted in
11:50 ostentatious displays of wealth in
11:52 excess as Thomas and Morgan wit write
11:55 quote he bought Champagne by the truck
11:57 caviar by the case and Suits by the
11:59 Dozen end quote he owned two Yachts
12:03 multiple houses and a distinctive canary
12:05 yellow Rolls-Royce that fed him around
12:07 the city like a modern-day Pharaoh
12:09 appearances however can be deceiving
12:12 Livermore may have been in his own words
12:14 quote disgustingly rich but he wasn't
12:16 snoody or pompous or a pinky out kind of
12:19 guy he didn't come from money he talked
12:21 with the thick accent of a Boston dock
12:23 worker and was armed with the dirty
12:25 jokes to match he had no interest in art
12:28 or culture or music he thought it was
12:30 all a waste of time unless of course it
12:32 could help get you laid the only
12:34 literature he could quote by heart was
12:36 the King James Bible but beneath this
12:38 weird off-putting paradoxical package of
12:41 obscene wealth and blue collar New
12:42 England charm was an astonishingly
12:45 intelligent human being Livermore was
12:48 easily the smartest man in any room he
12:50 walked into he was both a math guy and a
12:53 words guy which in my experience is as
12:55 rare as a unicorn and twice as
12:57 impressive he had a natural gift for
12:59 language and verbiage as Thomas and
13:01 Morgan wit write quote Livermore could
13:03 speak as well as he could write despite
13:05 his lack of sophistication and social
13:07 polish he possessed a natural command of
13:09 the language much of what he dictated
13:12 was good enough to go straight into
13:13 print end quote and Livermore bent that
13:16 formidable intellect toward his one true
13:18 love the thing he cared about more than
13:20 any car or yacht or showgirl or box of
13:23 Cuban cigars in his heart of hearts
13:26 Livermore didn't really love any of that
13:27 stuff he didn't even love being Rich
13:29 Livermore was in love with the game the
13:32 market the adrenaline rush of Fortunes
13:35 banked and broken the roller coaster
13:37 Thrill Ride that only the stock market
13:39 can provide and he was very very good at
13:43 it how good you might ask well on Black
13:46 Tuesday after a week that had snapped
13:48 the spine of the American economy rocked
13:50 Banks and brokerages from coast to coast
13:52 driven millionaires to financial ruin
13:54 and shocked the International Community
13:57 Jesse Livermore walked away away with a
13:59 profit of $100
14:01 million that's about 1.5 billion today
14:06 so how did he do this how was he able to
14:09 predict a crash that blindsided so many
14:12 other people well to answer that we need
14:14 to go back way back before 1929 before
14:18 the Roaring 20s before World War I
14:21 before anyone on Main Street had even
14:23 heard of Wall Street we have to go back
14:25 to the place where livermore's love
14:27 affair with the stock market first began
14:29 it all started with a $5 bill and a tiny
14:32 corn farm in Massachusetts when Laura
14:36 Livermore gave birth to her third child
14:38 in a small farmhouse in 1877 the timing
14:41 was not great it was an unplanned
14:44 pregnancy it was an accident money was
14:46 tight and her husband Hyrum was
14:48 extremely not psyched about having yet
14:51 another mouth to feed but when the baby
14:54 boy came bouncing into the world they
14:55 named him Jesse and hoped for the best
14:58 Laura Livermore was a simple
15:00 kind-hearted Woman Who Loved all three
15:02 of her children dearly but almost
15:04 immediately she noticed something was
15:06 different about her youngest son Jesse
15:09 the kid was freakishly smart by the age
15:11 of four he could read and write as well
15:13 as children twice his age one day when
15:16 he was six Laura found Jesse fishing the
15:18 crumpled pages of a newspaper out of the
15:20 trash can and smoothing them out he was
15:23 reading the financial Pages as it turned
15:25 out numbers just came naturally to Jesse
15:28 grade after grade year after year he
15:30 amazed his teachers at school with his
15:32 ability to formulate complex equations
15:35 in his head no pen no paper he could
15:37 just crunch the numbers on the Fly and
15:39 when he was around 10 or 11 he
15:41 challenged his math teacher to an
15:43 arithmetic competition and won it was
15:46 also around this age that Jesse started
15:48 to notice that he was very popular with
15:50 the opposite sex the girls loved him
15:53 there was just something magnetic about
15:54 him something too subtle for words at
15:57 home Jesse's mom Laur La could see her
15:59 son was growing into someone very
16:01 special on the surface Jesse was just a
16:03 pale skinny kid with a mop of strawberry
16:05 blonde hair but his mind was like a
16:08 hummingbird flitting from problem to
16:10 problem with ease as long as Jesse could
16:12 continue to get an education there was
16:14 no telling how far he could go but
16:16 Jesse's dad had other plans to hyram
16:19 Livermore his youngest son Jesse was
16:22 just the soft runt of the litter
16:24 pampered by his indulgent mother and
16:26 obsessed with useless books and
16:28 arithmetics because after all math
16:30 couldn't pull a plow math could not
16:32 plant crops math couldn't make money and
16:34 the liverm mores were always desperately
16:36 short of that so when Jesse was 14 years
16:39 old his dad hyram pulled him out of
16:41 school and put him to work on the Family
16:43 Farm And for a time it seemed like
16:45 Jesse's sparkling intellect might die on
16:48 the vine that this blossoming Prodigy
16:50 would be lost and a drift in the soul
16:53 crushing backbreaking manual labor of a
16:55 common field hand but Laura believed her
16:58 son undeserved much more she did not
17:00 want to see him turn out just like his
17:02 dad tired unimaginative and bitter so
17:06 according to one historian quote
17:08 unwilling to squander her son's glowing
17:11 potential she packed him a satchel
17:12 filled with some food and a few changes
17:14 of clothes and she slipped him a $5 bill
17:17 as per his mother's instructions
17:19 Livermore snuck out the front door late
17:21 one evening flagged down a passing wagon
17:23 and hitchhiked out of town end quote
17:26 over the course of his life Jesse Li
17:28 would love many many many many women but
17:31 the most important and influential woman
17:33 in all the long years of his life was
17:36 his mom Laura didn't know it yet but her
17:38 son would use that $5 bill to become one
17:41 of the richest men on planet Earth but
17:44 the babyfaced 14-year-old that snuck off
17:46 the corn farm in 1891 was a long long
17:49 way from Fifth Avenue riches thankfully
17:52 the young mathwiz knew exactly where to
17:54 get started when his hitchhiking ride
17:56 asked him where he wanted to go Jesse
17:58 didn't hesitate take me to the local
18:00 stock brokerage back in livermore's day
18:03 the stock market worked more or less
18:05 exactly the same way it does today
18:06 investors can buy shares or little
18:09 pieces of publicly traded companies the
18:12 price of those shares fluctuates based
18:13 on the value of the company real or
18:15 perceived if the stock rises above the
18:18 price you paid for it you make money if
18:20 it goes down you lose money in a perfect
18:23 world you invest in a company because
18:25 you believe in its long-term future and
18:27 by extension you believe its value will
18:30 rise over time in return for your
18:32 confidence and cash that company uses
18:34 the money you've invested to fund
18:36 research expansion Innovation all that
18:39 good stuff in theory anyone can invest
18:41 in stocks and make money but the stock
18:43 market in the last days of the 19th
18:45 century was much less accessible than it
18:48 is today there is no Robin Hood app
18:50 there is no E Trade if you wanted to
18:52 play the stock market you had to go to a
18:54 stock brokerage and speak to a stock
18:56 broker you say hello good sir I would
18:58 like to buy this many shares of this
19:00 particular company and that broker would
19:02 say why yes sir it would be my pleasure
19:04 the broker would then place the order on
19:06 your behalf and you would receive a
19:08 paper certificate that proved your
19:10 ownership of those shares at that price
19:12 and if you ever lost confidence in the
19:14 health of that company or just wanted to
19:16 bank a profit you could simply sell your
19:18 shares to a new buyer a transaction that
19:20 was facilitated by that broker for a
19:22 small fee but at the turn of the 20th
19:24 century the vast majority of Americans
19:27 didn't even know what the stock Market
19:28 was much less how to buy and sell stocks
19:31 most people in the United States were
19:32 living below the poverty line so the
19:34 idea of having enough extra money to
19:36 invest in something as intangible and
19:39 Abstract as the stock market was a
19:41 completely alien concept as a result the
19:43 stock market was a big boys club only
19:46 limited to the ultra Rich Ultra
19:48 connected and Ultra Bor with plenty of
19:51 fun money to burn it was not a club that
19:53 looked kindly on Outsiders and
19:56 14-year-old Jesse Livermore was most
19:59 definitely an outsider when he walked
20:00 into a brokerage firm in Boston called
20:02 Payne Weber and Co but Jesse didn't want
20:04 to buy any stock he wanted a job these
20:07 skeptical Boston Brokers took a chance
20:10 on the Pasty softspoken Farm Boy and
20:12 just like that Jesse Livermore had his
20:15 foot in the door it was not a glamorous
20:18 gig Jesse's job was to sit at a
20:20 chalkboard all day long and record the
20:22 stock prices of certain companies as
20:24 they fluctuated throughout the day not
20:26 exactly a challenging ask for a mind as
20:29 sharp as his a few years earlier he'd
20:31 made a fool of his math teacher on a
20:32 chalkboard just like this one and now he
20:35 was working as a glorified printing
20:36 press at first it seemed like Mindless
20:39 robotic drudgery scribble the price wait
20:42 for the change erase the price write the
20:44 new one repeat repeat repeat but as the
20:47 weeks turned into months Jesse started
20:50 to see something something that no one
20:52 else could he was seeing patterns Trends
20:56 correlations he soon discovered that
20:58 that he could read the ticker tape like
20:59 a sheet of music he could see rhythms
21:02 and Melodies and motifs that were all
21:03 but invisible to everybody else Jesse
21:05 looked around at all these professional
21:07 Brokers and buyers and realized they had
21:09 no system they were just guessing
21:12 gambling working off of bogus tips and
21:14 meaningless hunches Jesse barely on the
21:17 right side of puberty decides to create
21:19 his own system he gets himself a little
21:22 notebook and starts recording the stock
21:24 prices at the end of each day he does
21:26 this for 6 months it me nothing at first
21:29 but with each passing day he got more
21:31 and more data and like standing an inch
21:33 away from a painting and slowly backing
21:35 away it all started to come into Focus
21:38 as Livermore remembered years later
21:40 quote those quotations did not represent
21:42 prices of stocks to me so many dollars
21:44 per share they were numbers of course
21:47 they meant something they were always
21:48 changing it was all I had to be
21:50 interested in the changes why did they
21:52 change I didn't know I didn't care I
21:55 didn't think about that I simply saw
21:57 that they changed and that was all I had
22:00 to think about 5 hours every day and two
22:02 on Saturdays that they were always
22:04 changing end quote over the course of
22:06 his data Gathering Jesse starts trying
22:08 to guess what the price of a particular
22:11 stock would do over the course of a day
22:13 a week a month he makes predictions and
22:15 then he records which of his predictions
22:17 were correct or incorrect this
22:19 meticulous data Gathering combined with
22:22 an Indescribable gut instinct is what
22:24 starts to set Jesse Livermore apart
22:27 after months of doing this Jesse decides
22:29 to put his system to the test one thing
22:32 Americans have always excelled at is
22:34 gambling there is nothing we won't
22:36 gamble on some people bet on horses
22:39 others bet on boxing or football but all
22:41 over the United States in the early 20th
22:43 century there were places where you
22:44 could gamble on the fluctuations of the
22:46 stock market itself and these were
22:48 called bucket shops as mentioned earlier
22:51 very few Americans had enough cash to
22:53 actually buy shares on the stock market
22:55 but bucket shops were a place where you
22:57 could go to get in on the action without
22:59 the Steep price of admission bucket
23:01 shops allowed you to bet on the movement
23:03 of a particular stock without having to
23:05 buy actual shares think of it kind of
23:07 like a dog track or a horse race or a
23:09 casino you're trying to pick winners and
23:12 if you guess correctly you get a nice
23:14 little payout and these were not exactly
23:16 the most respectable joints so imagine
23:18 their surprise when a babyfaced
23:20 blue-eyed teenager walked in on his
23:22 lunch break looking to make some money
23:24 as Jesse Livermore remembered quote I
23:27 had never bought or sold anything in my
23:29 life and I had never gambled with the
23:31 other boys but all I could see was that
23:33 this was a grand chance to test the
23:35 accuracy of my work of my hobby end
23:38 quote equipped with his trusty notebook
23:40 Jesse placed his very first bet on a
23:42 Railroad stock that he believed was due
23:44 for an upswing he put down $5 the same
23:48 amount his mom had given him the night
23:50 she'd helped him leave the farm and lo
23:52 and behold Jesse was right about that
23:55 stock he made a profit of $3 12 cents on
23:59 the trade and from that moment on Jesse
24:01 Livermore was truly madly deeply in love
24:05 with the stock market what began as an
24:07 experimental side hustle became a
24:09 full-blown infatuation Jesse placed bet
24:12 after bet after bet at the bucket shops
24:14 all over Boston and more often than not
24:17 his predictions were dead on he
24:19 discovered that he could make several
24:20 months worth of wages in a single day's
24:23 plunge into the bucket shops when he was
24:25 16 2 years after he' left home just
24:27 Livermore went back to the farm and
24:29 slapped 1,000 bucks on the kitchen table
24:32 his father who'd underestimated him all
24:35 his life was stunned into silence his
24:38 mother Laura was proud but worried about
24:41 where this path might lead her teenage
24:43 son but as Jesse's profitable hot streak
24:46 continued he started to look suspicious
24:48 to The Operators of these bucket shops
24:51 they grew resentful of this wonderkind
24:53 people were starting to call the boy
24:54 plunger or the boy traitor no one was
24:57 right that often they whispered no one
25:00 was that good this kid and his stupid
25:03 little notebook were screwing up their
25:05 profit margins basically Jesse pissed
25:07 off the casino so the bucket shops one
25:10 by one start to permanently ban Jesse
25:13 they won't take his money they won't
25:15 place his bets some places won't even
25:16 let him through the front door Jesse
25:18 became Persona nrata at every bucket
25:21 shop in New England but Jesse Livermore
25:23 was not one to admit defeat so easily
25:25 and in an attempt to outwit the bucket
25:27 shops he uh gets creative as one
25:29 historian writes quote he dawned a
25:32 number of disguises among which included
25:34 fake beards oversized coats wide brimmed
25:37 hats that shielded part of his face and
25:39 so on before entering the shops and he
25:42 provided clerks with various aliases
25:44 unfortunately the clerks cottoned onto
25:46 his real identity almost every time
25:48 whereupon he was promptly booted from
25:50 the premises end quote for Jesse it was
25:53 heartbreaking just when he'd found his
25:55 life's calling just when he'd found
25:57 something he was was really really good
25:59 at it had all dried up in front of his
26:01 eyes I mean what was he going to do now
26:02 go back to the farm become just like his
26:05 dad or toil away day after day after day
26:08 in his monotonous 9 to5 Jesse Livermore
26:10 wasn't scared of much but the thing that
26:12 terrified him more than anything else
26:14 was a life of mediocrity but as they say
26:17 when life closes a door it opens a
26:20 window as Livermore reflected decades
26:22 later quote if it hadn't been for the
26:24 bucket shops refusing to take my
26:26 business I never would have stopped
26:27 trading in them and then I never would
26:29 have learned that there was much more to
26:30 the game of stock speculation than to
26:32 play for fluctuations of a few points
26:35 end quote Jesse decided that he was
26:37 going to make big money real money and
26:40 the only place to do that he believed
26:42 was in New York City Jesse Livermore was
26:45 heading to Wall Street it was the year
26:47 1900 a new century had arrived and
26:51 Livermore was 22 years old so much had
26:54 changed since he'd left the corn farm at
26:55 the age of 14 he wasn't a boy anymore
26:58 but the world was changing too and it
27:01 was changing
27:05 [Music]
27:26 fast
27:28 before we get back to the show let's
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28:47 to the
28:49 show it's the fall of 1923 we're in a
28:52 doctor's office in Berlin the capital of
28:55 Germany and for weeks a Str strange
28:57 baffling illness has been spreading
28:59 across the country as far as German
29:02 Physicians could tell it was some kind
29:03 of mental Affliction which would
29:05 suddenly seize people with no history of
29:07 psychological illness according to
29:09 financial historian lakat ahed quote
29:12 those Afflicted were apparently normal
29:14 in every respect except according to the
29:17 New York Times quote for a desire to
29:19 write endless rows of ciphers and engage
29:22 in computations more involved than the
29:24 most difficult problems and logarithms
29:26 perfect ly sensible people would say
29:29 that they were 10 billion years old or
29:31 had 40 trillion children apparently
29:34 cashiers bookkeepers and bankers were
29:36 particularly prone to this bizarre
29:39 disease the German doctors started
29:41 calling it Cipher stroke it was a vague
29:44 inadequate name but they didn't know
29:45 what else to call it one thing was clear
29:48 however anyone who had to regularly
29:50 calculate the rapidly falling value of
29:52 German currency was at a high risk of
29:55 developing Cipher stroke 5 years earlier
29:59 in 1918 Germany had Lost World War I the
30:02 Great War and when you lose a war that
30:05 has killed something like 20 million
30:06 people there are consequences in
30:09 particular Financial consequences when
30:12 the young men of Germany had marched off
30:14 to fight in a slurry of mud and viscera
30:16 on the French Frontier in 1914 they did
30:19 so with the iron conviction that as ahed
30:22 writes quote the war would be short that
30:24 the Reich would Prevail and that it
30:26 would then present the bill to the
30:28 vanquished end quote instead the
30:31 opposite happened the war dragged on for
30:34 four long years the Kaiser Was Defeated
30:37 and exiled and the principal Victors of
30:39 that war Great Britain France and the
30:42 United States flung a massive
30:44 insurmountable reparations bill at
30:46 Germany's feet with a sense of smug
30:48 satisfaction the artillery barrels had
30:50 barely cooled before the Allies began
30:52 drawing up a plan to make Germany pay
30:54 through the nose to as one British
30:56 newspaper put put it quote squeeze
30:58 Germany until the Pips squeak end quote
31:02 this was punishment pure and simple and
31:05 after many months of political wrangling
31:07 in Paris it was decided that Germany
31:08 would pay $33 billion in reparations for
31:12 their role in The Great War it was money
31:15 that they did not have in an attempt to
31:17 keep Pace with the bottomless appetites
31:19 of their own War Machine Germany had
31:20 begged borrowed and inflated its
31:22 currency to stay in the fight so when
31:24 the bill came due all Germany had in its
31:26 Pockets was 2 million dead men and some
31:28 clumps of lint the consequences were
31:31 catastrophic for Germany's economy the
31:33 wartime inflation combined with the
31:36 Staggering reparations Bill and a
31:38 post-war treasury that printed money
31:39 like ski ball tickets essentially made
31:42 Germany's currency the mark worthless it
31:45 was as one historian colorfully put it
31:47 quote a voyage of fantasy into the outer
31:50 Realms of the monetary universe end
31:52 quote before World War I a German Mark
31:56 was worth about 25 cents so a quarter of
31:58 a US dollar by 1923 according to one
32:01 publication quote 42 billion marks was
32:05 worth 1 American Cent end quote as Ahmed
32:09 writes quote basic necessities were now
32:12 priced in the billions a kilo of butter
32:15 cost 250 billion a kilo of bacon 180
32:19 billion a simple ride on a Berlin street
32:21 car which had cost one Mark before the
32:23 war was Now set at 15 billion it became
32:27 meaningless to talk about the price of
32:28 anything because the numbers changed so
32:30 fast economic existence became a race
32:33 workers once paid weekly were now paid
32:36 daily with large stacks of notes every
32:39 morning big trucks loaded with laundry
32:41 baskets full of notes rolled out of the
32:43 reiches bank printing offices and drove
32:45 from Factory to factory where someone
32:47 would clamber a board to pitch great
32:48 bundles to the stolen crowds of workers
32:51 who would then be given half an hour to
32:52 rush off and buy something before the
32:54 money became worthless and ahed goes on
32:57 in a later chapter quote those with
32:59 money desperate to be rid of it before
33:01 it became worthless indulged in giddy
33:04 frenzies of spending while those without
33:06 sold what few possessions remained to
33:08 them including their bodies in the
33:10 struggle to survive end quote it was no
33:13 wonder people started wandering into
33:14 doctor's offices with Cipher stroke
33:17 scribbling computations and equations
33:19 because the Basic Value of Money the
33:21 basic meaning of numbers themselves had
33:23 become so unstable were you 40 years old
33:26 or 40 2 billion did you get married 3
33:29 years ago or 100 million it was a very
33:32 dark time for Germany with darker times
33:35 still ahead as we all know as the writer
33:37 Stefan schag remembered quote how Wild
33:41 anarchic and unreal were those years
33:44 years in which with the dwindling value
33:46 of money all other values in Austria and
33:49 Germany began to slip it was an Epoch of
33:52 high ecstasy and ugly scheming a
33:55 singular mixture of unrest and
33:57 fanaticism end quote but across the
34:00 Atlantic a very very different mood was
34:03 in the air in America the mid to late
34:05 1920s was the wildest RI roaring party
34:09 of all parties World War I had
34:11 transformed America's fortunes too but
34:13 while Germany was suffering through
34:15 apocalyptic inflation and social
34:17 instability America was experiencing the
34:20 greatest windfall in its history as
34:22 historian Scott Nations puts it for
34:24 American industrialist quote it became
34:27 nearly impossible to not make money
34:30 during the War years end quote before
34:32 World War I the city of London had been
34:35 the center of the financial universe but
34:36 all that changed with the guns of August
34:38 in 1914 as liakat ahed explains in his
34:42 book Lords of Finance quote to pay for
34:45 the four long destructive years just
34:47 passed every country in Europe had tried
34:49 to borrow as much as it could from
34:51 wherever it could the effect was to
34:53 create a seismic shift in the flow of
34:56 capital around the the world both
34:58 Britain and France were forced to
34:59 liquidate a huge proportion of their
35:02 Holdings abroad to pay for essential
35:03 Imports of raw materials and both
35:06 eventually resorted to large-scale
35:07 borrowing from the United States by the
35:10 end of the war the European Allied
35:12 Powers 16 countries in all owed the
35:14 United States about 12 billion of which
35:17 a little under 5 billion was due from
35:18 Britain and 4 billion from France end
35:21 quote gold flowed out of Europe across
35:25 the Atlantic into New York City banks in
35:27 what our old friend Jesse Livermore
35:29 called quote a colossal suction pump any
35:32 money that Germany could scr up for
35:34 reparations went to Great Britain and
35:36 France who in turn tried to pay back
35:37 their debts to the us as Europe got
35:40 poorer America got richer when a
35:43 suggestion was made to President Calvin
35:45 kulage that the US forgive the war debts
35:47 owed by their allies he scoffed quote
35:50 they borrowed the money didn't they they
35:52 need to repay it end quote the sun was
35:55 finally setting on the British Empire
35:57 and in its place the United States was
35:59 basking in the glow of Newfound
36:01 relevance it was a good time to be an
36:03 American but the good times weren't
36:05 happening just because of a change in
36:07 the status quo of international banking
36:09 a massive wave of technological
36:11 innovation was happening in the US one
36:13 that would revolutionize the basic
36:15 fabric of American life forever it was a
36:18 change that was clearly evident to a man
36:20 named Nate Shaw Nate Shaw was a black
36:23 sharecropper from Alabama he couldn't
36:25 read and he could Couldn't Write his
36:27 father had been a slave but in 1926 Nate
36:30 Shaw bought his very first car a Ford
36:33 Model T with cash and he didn't buy it
36:36 as a crucial need for his life or
36:38 business it was a Leisure purchase as
36:41 Nate remembered telling his buddies
36:42 quote I told him yeah I'm thinking of
36:44 buying me a car going to get me a new
36:46 Ford I'm thinking about it I haven't
36:48 done it yet but that's my thorough aim
36:50 my boys anyway they got big enough to go
36:52 and correspond with girls and I think
36:54 I'll just buy me a new Ford to please
36:56 them end quote the fact that the
36:58 illiterate son of a slave living in the
37:01 Deep South could afford a brand new car
37:03 just for fun was not only striking
37:06 evidence of the wave of prosperity
37:08 America was experiencing in the 20s it
37:10 was exactly what Henry Ford had dreamed
37:12 of when he first conceived of the Model
37:13 T quote I will build a motor car for the
37:16 great multitude it will be large enough
37:19 for the family but small enough for the
37:20 individual to run and care for it will
37:23 be constructed of the best material by
37:25 the best men to be be hired after the
37:27 simplest designs that modern engineering
37:29 can devise but it will be so low in
37:32 price that no man making a good salary
37:34 will be unable to own one and to enjoy
37:36 with his family the blessing of hours of
37:39 pleasure in God's Great Open Spaces end
37:42 quote these days obviously you can throw
37:44 a rock in any direction and hit a car
37:47 but we tend to take that ubiquity for
37:49 granted I mean the automobile completely
37:51 changed American life it connected
37:53 communities in unprecedented ways people
37:56 who had never left left their Hometown
37:57 were now able to travel hundreds of
37:59 miles at a whim across entire States in
38:01 a single day that in turn drove
38:04 infrastructure development roads
38:06 highways Bridges and that in turn
38:08 created more jobs which provided the
38:10 wages to pay for more cars and on and on
38:12 and on but crucially for our story at
38:15 least the rise of the automobile also
38:17 introduced many Americans to the notion
38:19 of buying things on credit it was a
38:22 transformative concept being able to buy
38:25 something you wanted now and pay for it
38:27 later over the course of small
38:29 installments and at the height of the
38:30 Roaring 20s there were so so many things
38:33 to buy it was a time of breathless
38:35 technological innovation in consumer
38:37 goods as historian Charles R Morris
38:39 writes quote Big Ticket items like cars
38:42 and Furniture led the parade but there
38:44 were easy payment plans for posos radios
38:47 phonographs vacuum cleaners and even
38:48 impulse items like jewelry and clothing
38:51 which by themselves accounted for half
38:53 the total borrowing measured by its
38:55 economic impact the evolution of
38:57 consumer credit was nearly as portentous
39:00 as the light bulb or the internal
39:02 combustion end quote it was as one
39:04 historian writes quote the world's first
39:07 consumer Paradise end quote yes change
39:11 was in the air literally in fact across
39:14 the airwaves the recent invention of
39:16 radio was bringing a dizzying flow of
39:19 information entertainment and
39:20 advertising into American Homes way back
39:23 in 1865 an editorial in the Boston Post
39:26 had made a prediction about the future
39:28 of the then embryonic radio quote
39:30 well-informed people know that it is
39:32 impossible to transmit the voice over
39:34 wires and that were it possible to do so
39:37 the thing would be of no practical value
39:40 end quote a Scottish mathematici named
39:43 William Thompson went on to put it a bit
39:44 more bluntly in
39:46 1897 radio has no future end quote and
39:51 boy oh boy were they Wrong by the early
39:53 1920s radio technology had really come
39:55 into its own and Americans were buying
39:57 radio sets in droves it was now possible
40:00 to hear your local mayor your Governor
40:02 even the president himself speak
40:04 directly to you in your home but that
40:07 was just the tip of the iceberg
40:08 Americans could listen to the orchestra
40:10 band performances boxing matches dramas
40:12 soaps and comedy skits Mass
40:14 entertainment of every Form and Function
40:17 was percolating into households from
40:18 coast to coast across the Atlantic in
40:21 post-war Germany formerly middleclass
40:23 families were being driven to
40:24 prostitution and crime just to make the
40:26 rent but in America Pleasant Sunday
40:28 drives with the wife and kids became a
40:30 cultural Main and nowhere was the sense
40:33 of Blue Sky optimism and boundless
40:36 Prosperity stronger than in New York
40:38 City if America was a party New York was
40:40 the VIP room and Wall Street was the DJ
40:43 booth setting the tone for it all as
40:46 Charles R Morris writes the city was
40:48 quote swimming in money Global monetary
40:51 Rivers had rechan to run through New
40:53 York the deepening sediments of gold
40:55 dust provided the Loose Change to pay
40:57 for great advances in broadcasting and
41:00 Publishing in advertising and popular
41:02 entertainment in Couture in culture and
41:04 the Arts and finally for the decades
41:07 great building boom that established
41:09 skyscraper Art Deco as the
41:11 characteristic New York City design
41:13 standard end quote as the 20s roared on
41:16 everything in New York seemed to be
41:17 going up skyscrapers Real Estate Value
41:21 even skirts by this point flapper
41:23 fashion had taken hold in the form of
41:25 boyish bob hair cuts and revealing skin
41:27 thin party dresses as Morris writes
41:30 quote a business newspaper calculated
41:32 that in 1928 that since the war the
41:35 material required for a woman's clothing
41:37 had dropped from 19 and a/4 yards to
41:40 only seven end quote that skimpy new
41:43 style even radiated out into small town
41:45 America as one mother from Muny Indiana
41:47 said quote the dresses girls wear to
41:49 school now used to be considered party
41:51 dresses end quote it was boom time in
41:55 America baby and with within this
41:56 cultural context in a country a wash in
41:59 excitement prosperity and positivity the
42:02 American public first became acquainted
42:04 with a seductive new mode of wealth
42:06 creation the one the only stock market a
42:10 toxic self-destructive love affair was
42:13 about to
42:16 [Music]
42:25 begin
42:26 [Music]
42:39 I'm moaca and I'm excited to announce
42:41 season four of my podcast mobituaries
42:45 I've got a whole new bunch of stories to
42:47 share with you about the most
42:49 fascinating people and things who are no
42:52 longer with us from famous figures who
42:55 died on the very very same day to the
42:57 things I wish would die like buffets all
43:02 that and much more listen to mobituaries
43:05 with moaca wherever you get your
43:08 podcasts it's the spring of
43:11 1929 we're in Flint Michigan and a
43:14 34-year-old mailman named Homer dowy is
43:17 making deliveries along his daily route
43:20 Homer had been a mailman for about 4
43:22 years and in that job he made 60 cents
43:24 an hour for an annual salary of
43:27 $2,100 it wasn't the most flashy job but
43:29 it was stable free from the threat of
43:32 unexpected layoffs as Homer assured his
43:34 wife quote it's a permanent job
43:36 everybody else can get laid off but they
43:38 still like to get letters end quote but
43:41 on that fine spring day in 1929 Homer
43:43 dowy had more than just letters in his
43:45 mailbag he noticed that it was stuffed
43:48 with distinctive manila envelopes and as
43:50 he went to drop off one of those
43:51 envelopes to a particular house he
43:53 noticed that a woman was waiting outside
43:55 the front door for him Homer was right
43:58 everybody liked to get letters but this
43:59 woman was chomping at the bit to receive
44:01 her mail that day she was hopping around
44:04 like a kid on Christmas morning when
44:05 Homer handed her a manila envelope with
44:07 her name on it she quote ripped open the
44:10 envelope in front of me and then danced
44:12 up and down with excitement she
44:14 explained to Homer that she had just
44:15 quote made a killing in General Motors
44:19 end quote the envelopes all of them
44:21 contained checks from brokerage houses
44:24 profits from the stock Market making
44:26 their way from Wall Street to Flint
44:28 Michigan and as time went on Homer
44:30 noticed more and more manila envelopes
44:33 for people on his route it seemed to him
44:35 that quote a lot of Flint folk were
44:37 winning in the market end quote and they
44:40 most definitely were for almost seven
44:43 incredible Years starting around 1923
44:46 the stock market had seen an
44:47 astronomical rise in share prices
44:50 everywhere Homer looked it seemed like
44:51 people were getting rich it was easy
44:54 they said to not play the stock stock
44:56 market was like leaving stacks of money
44:58 on the table and although the fomo was
45:00 strong Homer resisted the urge to join
45:02 the party the financial sorcery
45:04 practiced on Wall Street seemed vague
45:06 and risky and Shady to him Homer was a
45:09 traditional guy very conservative the
45:12 best way to make money was honest pay
45:14 for honest work and he believed that the
45:16 safest place for his money to be was at
45:18 the local bank not in stocks but very
45:21 few people shared Homer's hesitation
45:23 about the stock market in the spring of
45:25 192 29 a decade earlier the concept of
45:28 investing in anything much less the
45:31 stock market was a strange and
45:32 mysterious notion to the American public
45:35 but all that changed when the United
45:37 States entered World War I in 1917 on
45:40 behalf of the Allies to finance a rapid
45:43 military buildup the government needed
45:44 to raise loads of quick cash so they
45:46 started issuing something called Liberty
45:48 Bonds a bond basically is a contract
45:51 with your government when you buy a bond
45:53 you're essentially loaning your
45:55 government a small amount of money in
45:57 the short term and then if you're
45:58 patient they will pay you back a
45:59 slightly larger amount after 10 20 30
46:02 years it's one of the safest Investments
46:05 you can make because it's backed by the
46:06 inherent stability of a government well
46:08 during World War I the US government
46:10 marketed liberty bonds to the American
46:12 public as a win-win type of product not
46:15 only are you supporting the war effort
46:16 like a good Patriot you also get a small
46:19 profit from your investment in the form
46:21 of Interest down the road the Liberty
46:23 Bond introduced the fundamental concept
46:25 of investing to millions of Americans it
46:28 was the first investment many people
46:30 ever made and around the same time of
46:32 course Americans were introduced in Mass
46:34 to another concept that we've already
46:35 talked about credit pay as you go buying
46:39 stuff with borrowed money people bought
46:42 cars Furniture refrigerators radio sets
46:44 jewelry even Cosmetics on credit a
46:47 little money down and some interest
46:48 along the way and you can have whatever
46:50 you want instantly it's a lending system
46:53 that still drives the engine of our
46:54 economy today well right around the mid
46:56 1920s these two concepts investing and
46:59 credit met got drunk hooked up and had a
47:02 baby from Hell allow me to explain if
47:05 Homer dowy had ever gotten tired of his
47:07 60 cents an hour job and decided to make
47:09 some real money on the stock market he
47:11 would have gone down to one of the local
47:12 brokerage offices in Flint and once
47:14 there he would have been presented with
47:16 an amazing opportunity Homer homie homes
47:19 my guy a slick broker would have said
47:22 for just a little money down you can
47:24 make an obscene profit well how do I do
47:27 that the humble mailman might have
47:29 replied and the stock broker would have
47:31 proceeded to blow his mind he would have
47:33 explained to Homer the magic of buying
47:36 on margin buying on margin essentially
47:40 means that you do not have to pay for a
47:42 share of a stock in full to enjoy the
47:44 potential upside of it so to keep things
47:47 simple imagine you want to buy one share
47:49 of General Motors stock priced at $50 a
47:52 share well in 1929 50 bucks is a lot of
47:56 money for the average person I mean for
47:57 Homer that's more than a week's wages
48:00 his wife will kill him if he gambles 50
48:02 bucks on the stock market not a problem
48:04 says the broker you don't need $50 I
48:07 only need 10% from you today or $5 I'll
48:11 just loan you the other 90% that loan
48:15 that's called your margin so buying on
48:18 margin well that's interesting Homer
48:20 thinks go on he says to the stock broker
48:24 the salesman's eyes glitter and shine
48:26 and he proceeds to tell the mailman more
48:28 now imagine General Motor stock goes up
48:31 which it will everything's going up
48:33 these days imagine if it goes up to $55
48:36 a share or 60 or Hell $70 a share you've
48:40 still only paid $5 down the rest you are
48:44 borrowing from the bank with a little
48:46 interest as the stock rises in value
48:48 it's paying off your loan if you decide
48:51 to cash out and take profits at 70 I
48:53 keep the chunk of the loan you haven't
48:54 paid off yet but you still make the
48:56 profit from the Stock's rise which in
48:59 this scenario is 20 bucks so think about
49:01 it Homer you've just turned $5 into $20
49:05 by doing nothing and the more money you
49:07 put down the more of these effects will
49:09 be compounded the magic of margin well
49:13 what happens if the stock goes down the
49:15 cautious and conservative Homer might
49:17 have asked at this point the stock
49:19 broker would have had to suppress a
49:20 laugh what a simple rube nothing goes
49:23 down in this market we're in the middle
49:24 of the most gravity F Bull Run in
49:26 history but he humors the misinformed
49:29 mailman well he would say if the price
49:31 of GM stock goes down below the price
49:34 you initially bought it at the value of
49:36 your down payment shrinks with it
49:38 proportionally which means you will need
49:40 to pay more money to maintain the
49:42 requirements of your loan if you can't
49:44 cover it I will take your stock away
49:47 from you and sell it to somebody else
49:49 who can pay you will lose your entire $5
49:51 investment in fact you might owe me a
49:53 little money and interest for giving you
49:54 the loan in the first first place the
49:56 entire system was a very sharp
49:58 double-edged sword as historian Michael
50:00 Pino summarized quote margin magnified
50:03 the stock buyer gains a 10% rise in
50:06 price would give the investor a 100%
50:09 return of course a 10% decline would
50:12 wipe the investor out end quote but at
50:16 this time trying to explain the
50:17 potential downside of margin buying was
50:19 like explaining the potential downside
50:21 of a foot massage I mean what could go
50:23 wrong the market was only going one way
50:26 up every expert every banker and
50:28 politician and broker from Muny to
50:30 Manhattan believed the stock market
50:32 would continue to sore How could an
50:34 average Joe not trust the people who
50:36 knew this stuff backwards and forwards
50:38 Homer dowy the mailman from Flint
50:40 Michigan never went into any brokerage
50:42 firm and he never bought any stock but
50:44 millions of Americans heard that deeply
50:47 seductive sales pitch and said you know
50:49 what here's $500 put me down for 50
50:52 shares of GM or RCA or us Steel I mean I
50:55 can make a year salary in a few good
50:57 weeks on the market let's see how fast
50:59 and far this gravy train can roll now
51:01 many banks and brokerages required
51:03 slightly higher deposits 20 30% but the
51:06 result was the same millions of
51:09 overleveraged firsttime investors buying
51:11 huge sums of stock on borrowed money if
51:15 they had asked our friend Jesse
51:16 Livermore what he thought about all that
51:18 he would have pulled a drag on his
51:20 handrolled Cuban and told them in a
51:21 thick Boston accent that they were
51:23 stupid sons of these smalltime
51:26 investors were minnow as Jesse called
51:28 them people who knew nothing about these
51:30 companies nothing about how this all
51:32 worked who just blindly handed over
51:34 their life savings on the fairy tale
51:36 Promises of a stock salesman they were
51:38 setting themselves up for a lot of pain
51:41 as Livermore said years after the crash
51:43 quote people who look for Easy Money
51:45 invariably pay for the privilege of
51:48 proving conclusively that it cannot be
51:50 found on this earth end quote making
51:53 money on the stock market was not is not
51:56 easy it required discipline intelligence
51:59 and good oldfashioned gut instincts
52:01 Jesse Livermore had all three since he'd
52:04 ran away from the corn farm in 1891 with
52:06 five bucks in his pocket the boy Trader
52:09 had been on quite the Wild Ride banned
52:11 from every bucket shop in New England
52:13 Jesse arrived on Wall Street with the
52:15 ambition of an emperor in the face of a
52:16 12-year-old but trading with the big
52:18 guys was not like scraping up Penny
52:20 profits in the bucket shops the aspiring
52:23 20-some day trader experienced a very
52:25 steep learning curve as he remembered
52:27 years later quote the game taught me the
52:30 game and it didn't spare me the rod
52:32 while teaching end quote over the course
52:35 of the next decade or so Jesse
52:36 livermore's net worth was like a golden
52:38 elevator it would go up and up and up
52:41 but then he would accidentally push a
52:43 wrong button and it would drop like a
52:44 rock but then he'd have a great idea a
52:47 great trade a great gut instinct and the
52:49 elevator would climb Skyward once again
52:52 when World War I ended in 1918 Jesse was
52:55 for 41 years old and he had been a
52:57 multi-millionaire multiple times he'd
53:00 gone bankrupt twice he'd been in debt
53:02 he'd owned yachts and cars and mansions
53:04 and then had to sell it all to cover his
53:06 losses then when he was back up he'd buy
53:08 it all back all over again now to most
53:11 people that sounds like a hellish ordeal
53:13 of stress and uncertainty but Jesse
53:15 loved every single minute of it Jesse
53:17 Livermore didn't care about security or
53:19 stability he lived for that Adrenaline
53:22 Rush the highs the lows the White
53:23 Knuckle roller coaster that only Wall
53:26 Street can provide anything to avoid the
53:29 Fate that he considered worse than death
53:31 a life of mediocrity of boredom the life
53:34 of a corn Farmer's son the one modum of
53:37 stability Jesse did allow into his life
53:40 was marriage to a young woman named
53:42 Dorothy fox went she was according to
53:45 one historian a quote Brooklyn Born
53:47 Beauty who had glossy Auburn curls
53:50 bottle green eyes a candy red pout and a
53:53 lovely hourglass figure end quote she
53:56 was half his age and full-on gorgeous
53:59 perfect wife material a mutual friend
54:01 said Jesse had been married once before
54:04 but that Union had collapsed faster than
54:06 a poorly timed investment this time
54:09 though Livermore assured himself this
54:12 was for real less than a month after the
54:14 guns fell silent on the Western Front in
54:16 France in 1918 Wedding Bells were
54:18 ringing at the St reges hotel as Dorothy
54:21 or dosy as Jesse called her became Mrs
54:25 Jesse Livermore engraved onto the ring
54:27 that he slipped on her finger that day
54:29 was the phrase dosi forever and ever she
54:33 called him JL Jesse loved dosi for a lot
54:36 of reasons at only 22 years old again
54:39 about half his age she was a knockout
54:42 she was fun she had a vivacious
54:44 firecracker personality that could light
54:45 up any cocktail party in New York and
54:48 Jesse took his Auburn haired trophy all
54:50 over the world they went yachting in
54:52 Europe summering in Palm Beach she was
54:54 the jewel in his crown but as we have
54:57 seen Jesse was not the kind of person to
54:59 ever be satisfied with what he had his
55:02 intelligence and ambition combined with
55:05 an almost self-defeating love of risk
55:07 and excitement soon drove a wedge
55:09 between he and his young wife Jesse
55:11 Livermore loved three things making
55:14 money on the stock market having sex
55:16 with beautiful women and spending time
55:18 with his new wife dosi in that order the
55:21 only thing that could rival Jesse's
55:23 appetite for Success on the stock market
55:25 was his appetite for women new women
55:28 strange women exciting women he would
55:30 cruise around New York in his yellow
55:32 Rolls-Royce hopping from party to party
55:34 until he found a Flopper that struck his
55:36 fancy he'd whisk them away to one of his
55:38 secret love nests around the city while
55:40 dosy waited at their Fifth Avenue
55:42 apartment for a husband who was not
55:44 coming home that night the next day
55:45 Jesse would just do it all over again
55:47 wham bam rinse and repeat as one
55:50 contemporary wrote quote when Livermore
55:52 is speculating he is thinking of
55:54 screwing and when he is screwing he is
55:56 thinking of speculating end quote well
55:59 it wasn't long before dosy found out
56:01 about Jesse's infidelity as Gordon
56:03 Thomas and Max Morgan witz write quote a
56:06 proud and possessive woman she loved her
56:08 husband deeply and the thought that he
56:10 found sexual Solace elsewhere was a
56:12 cruel blow one that she could not cope
56:14 with she would never have understood
56:16 that livermore's complex personality
56:18 required him to regularly pursue his
56:21 sexual padillos outside the marriage bed
56:23 he had a roving eye a fat wallet and he
56:26 did not see why marriage should hamper
56:28 his freedom end quote dosi confronted
56:32 Jesse about his side pieces constantly
56:34 but he would just take a puff on his
56:35 cubin run a hand through his ash blonde
56:37 hair and blow her off he didn't think
56:40 that he was doing anything wrong or at
56:42 least not enough to stop Jesse's
56:44 cheating took a heavy toll and dosi
56:46 eventually found comfort in one of the
56:48 few things that she could control
56:51 alcohol dosi drank and drank and drank
56:55 what began as a coping mechanism
56:56 eventually mutated into a crippling
56:58 addiction by the mid 1920s Jesse and
57:01 dosy Livermore were trapped in a
57:03 marriage where the addictions of one
57:04 partner drove the other deeper into
57:06 their own she drank because he cheated
57:09 and he continued to cheat because she
57:11 drank but Jesse and dosy Livermore were
57:14 not the only ones losing control as the
57:16 20s roared on by 1927 the American
57:20 public's timid flirtation with the stock
57:22 market was well on its way to becoming a
57:24 hot and heavy Affair from Chicago to
57:27 Miami to Atlantic City brokerages and
57:29 Banks sold tens of millions of stocks on
57:32 margin to firsttime investors who
57:34 desperately wanted a piece of the action
57:37 President Calvin kulage who usually
57:39 didn't say much had famously proclaimed
57:41 in 1925 that quote the business of
57:43 America is business end quote and
57:47 business was most definitely booming the
57:49 American economy seemed Unstoppable gold
57:52 was flowing in from Europe interest
57:53 rates were low people were buying buying
57:56 buying and the banks were lending
57:59 lending lending big companies like
58:01 General Electric AT&T General Motors and
58:03 US steel were going up and up picking a
58:06 winning stock started to seem as easy as
58:08 closing your eyes and throwing a dart at
58:10 the Blackboard big Bankers like JP
58:12 Morgan Jr and day trading Pirates Like
58:15 Jesse Livermore became celebrities in
58:17 their own right people looked at
58:19 successful financiers stock Brokers and
58:21 investors like we might look at actors
58:23 or musicians today they were the rock
58:25 stars the Titans the folk Heroes of the
58:27 American dream something to emulate and
58:30 aspire to they had made their fortunes
58:32 on Wall Street why couldn't a housewife
58:34 from Yonkers or a bellhop from Detroit
58:37 and the soundtrack to This growing
58:39 Obsession was the constant ticking of a
58:41 little device called the Western Union
58:43 stock ticker now today in modern times
58:46 we can track the fluctuations of stock
58:48 prices in microseconds but back in the
58:50 1920s how were you supposed to follow
58:52 and monitor the minute-to-minute change
58:54 changes in the stock market did they
58:56 publish every Company's stock price in
58:58 the paper or announce them on the radio
59:00 well sometimes yeah but that wasn't fast
59:03 enough every brokerage office every Bank
59:05 every post office even barber shops had
59:08 something called a stock ticker now odds
59:10 are you have heard that phrase before
59:12 but what exactly is a stock ticker well
59:15 essentially it's a printer imagine an
59:17 oversized snow globe or a glass
59:20 container with a solid base kind of like
59:22 the one that holds the magic row and
59:24 Beauty in the Beast now imagine that
59:26 within that glass is an intricate brass
59:28 machine with axles cogs and wheels all
59:31 attached to a thin spool of paper this
59:34 long coil of paper constantly printing
59:36 would twist like a snake skin into a
59:38 waist basket positioned below the ticker
59:41 now it all sounds very quaint today but
59:43 the psychological effect of the stock
59:44 ticker was profound remember this was an
59:47 ERA where almost all important
59:49 information is transmitted on a delay if
59:51 something big happens a fire a riot a
59:54 rally an election result whatever you
59:57 have to wait to read about it in the
59:59 paper the next day or wait until the
60:01 radio can broadcast a report about it
60:03 but the stock tickers were different
60:06 they were spitting out information
60:07 almost instantaneously Telegraph
60:10 operators and the New York Stock
60:11 Exchange would spend every minute of
60:13 every trading day updating the prices as
60:15 fast as humanly possible and relaying
60:17 them to every corner of the country
60:19 essentially It's A Primitive version of
60:21 a scrolling feed the ticker never stops
60:24 ticking it never stops updating and much
60:27 like we are glued to our phone screens
60:28 in the 21st century anxiously awaiting
60:31 the next like the next comment the next
60:33 quick hit of dopamine Americans in the
60:35 1920s were glued to the stock ticker
60:37 waiting to see how their Investments
60:39 were performing it was constant
60:41 NeverEnding instantaneous information
60:44 look away for a second and you might
60:45 miss something big but the tendrils of
60:47 the ticker weren't confined to the
60:48 shores of the USA either those signals
60:50 went out to Warsaw and Shanghai
60:53 Vancouver and Lisbon anywhere in the
60:55 world where people were buying and
60:56 selling stock a ticker was somewhere
60:59 close by spitting out yards upon yards
61:01 of paper every day the stock ticker was
61:04 the heartbeat the pulse of the
61:06 international economy and as the 1920s
61:08 hurdled towards its close that pulse was
61:11 quickening as one Italian newspaper
61:13 wrote quote with more Authority than the
61:15 League of Nations with more subtlety
61:17 than bolshevism another world power is
61:20 making a direct appeal to the strongest
61:22 Instinct of human nature the new power
61:25 is Wall
61:28 [Music]
61:37 [Music]
61:50 Street it's the summer of 1929 we're in
61:54 in New York City in a studio office
61:56 above Carnegie Hall outside the door
61:59 dozens of people are crammed into a
62:00 waiting room as the sound of stock
62:02 tickers were and rattle in the
62:04 background to pass the time they're
62:06 talking and shattering reading the Wall
62:08 Street Journal or other financial
62:09 publications and many of these people
62:11 have been waiting for hours but they
62:13 were all assured that their brief
62:15 consultation with the person behind the
62:16 door would be well worth the wait inside
62:19 the studio calling in clients one by one
62:22 was a 61-year-old woman named Evangeline
62:25 Adams Evangeline Adams was the most
62:28 famous fortune teller in America now
62:31 when we picture fortune tellers we tend
62:33 to think of long-haired witch in the
62:35 woods types dressed in flowing robes and
62:37 wearing Ault talismans but Evangeline
62:40 Adams looked more like an attorney or a
62:42 psychiatrist than a fortune teller her
62:44 wavy brown hair was cut short she wore a
62:47 plain black suit with strands of pearls
62:49 coiled high around her neck and when you
62:52 sat down across from her she would peer
62:54 at rat you over the rims of oval
62:55 spectacles and then run a wrinkled hand
62:57 across her literal crystal ball most
63:00 people who visited evangelene Adams in
63:01 her Studio above Carnegie Hall didn't do
63:04 so to contact dead loved ones or find
63:07 out when they were going to die most
63:08 people went to evangelene Adams for
63:10 advice on how to play the stock market
63:13 as Gordon Thomas and Max Morgan witz
63:15 write quote since 1927 coinciding with
63:18 an upsurge in the market evangelene had
63:20 concentrated on predicting its future it
63:23 had made her even richer even more
63:24 sought after 4,000 people a day wrote to
63:28 her at $20 a reading she claimed to
63:30 predict how the Dow Jones index in the
63:32 New York Times Industrial Averages would
63:34 behave her clients numbered some of the
63:37 most famous in the Land movie Queen Mary
63:39 Pickford always consulted Evangeline
63:41 before investing steel tycoon Charles
63:44 Schwab was said to base his buy and sell
63:46 orders largely on her predictions for
63:48 those who could not visit her Studios
63:50 above Carnegie Hall Evangeline produced
63:52 a monthly newsletter expl explaining how
63:54 the changing position of the planets
63:56 would affect stocks and shares over
63:59 100,000 people paid 50 cents each for
64:01 these forecasts advertised as quote a
64:04 guaranteed system to beat Wall Street
64:06 end quote The Seer of Wall Street as she
64:09 was later called red palms and consulted
64:12 the heavens a big part of her appeal was
64:14 that she seemed to be able to predict
64:16 events before they happened with
64:17 unnerving accuracy she had successfully
64:20 foreseen stock market upswings and
64:23 breaks Hotel fires and natural disasters
64:26 she had predicted the exact flight time
64:28 of Charles lindberg's famous
64:29 transatlantic voyage and was only off by
64:32 about 22 minutes she'd once in toned
64:34 about a terrible earthquake that would
64:36 level Tokyo and in 1923 it did and in
64:39 one especially creepy flourish she had
64:42 even supposedly foreseen her own death
64:44 which she firmly believed would come in
64:46 1932 but that was three long years away
64:50 and in the meantime Miss evangelene
64:51 Adams didn't prophesize for free once in
64:54 a restaurant a waiter had asked her for
64:56 a quick stock tip she coldly replied
64:59 quote you do not work for nothing why
65:02 expect me to end quote as her subscriber
65:05 list swelled and her Fame grew
65:07 evangelene Adams became a go-to resource
65:09 for investors in search of stock market
65:11 riches and whatever dark arts evangelene
65:14 had up her sleeve they were heralding a
65:16 very bright future asked what she
65:18 thought the remainder of 1929 held for
65:20 investors she CED quote the Dow Jones
65:23 could clim to Heaven end quote and
65:26 everything seemed to indicate that she
65:27 was right since 1924 the Dow Jones
65:30 Industrial Average had risen by
65:33 300% General Motor stock was worth 20
65:36 times what it had been a few years
65:37 earlier RCA radio Corporation of America
65:40 was worth 70 times would it had been
65:43 worth a few years earlier conventional
65:45 wisdom at the time dictated that to
65:47 paraphrase historian Mory Klein a stock
65:50 should sell at no more than 10 times
65:52 earnings but now the the Bulls were
65:54 saying that 15 times earnings was a more
65:56 apt figure for Modern Times And now few
65:59 speculators blinked at stock selling as
66:01 high as 30 times earnings there were
66:04 occasional dips and downturns in the
66:06 market of course but nothing significant
66:08 nothing that lasted long enough to cause
66:09 any serious concern as one Boston
66:12 Investment Trust cheerfully told its
66:13 clients quote temporary breaks come
66:16 indentions in the ever ascending curve
66:19 of American Prosperity end quote and
66:22 everybody was getting in on the action
66:24 as a stock Speculator named Bernard
66:26 baroo remembered quote taxi drivers told
66:29 you what to buy the shoe shine boy could
66:31 give you a summary of the day's
66:33 financial news as he worked with Rag and
66:35 polish an old beggar who regularly
66:37 patrolled the street in front of my
66:38 office now gave me tips my cook had a
66:41 brokerage account end quote as Mory
66:44 kleene writes quote no longer was the
66:47 stock market merely the playground of
66:48 the rich the ambitious and the
66:50 Professionals for the first time it
66:52 seemed as if anybody could play the wall
66:54 Street lottery in the hope of quick
66:55 effortless riches end quote one
66:58 professional stock Trader joked that
66:59 quote maybe the exchange should be moved
67:01 to Yankey Stadium end quote celebrities
67:04 like comedian grouo Marx leapt head
67:06 first into the market too grouo invested
67:09 almost every penny he earned in stocks
67:11 and enjoyed month after month of
67:13 handsome returns as he told a
67:14 newspaperman One Day quote what an easy
67:17 racket stock went up seven points since
67:20 this morning I just made myself
67:22 $7,000 end quote historian liakat ahed
67:26 explains the scope of the phenomenon
67:28 quote by 1929 anywhere from 2 to 3
67:31 million households one out of every 10
67:33 in the country had money invested in and
67:35 were engaged with the market trading
67:38 stocks had become more than a national
67:40 Pastime it had become a national
67:42 Obsession end quote a British journalist
67:45 named Claude cockburn who visited
67:46 America at the time agreed writing quote
67:49 you could talk about Prohibition or
67:51 Hemingway or air conditioning or music
67:53 or horses but in the end you had to talk
67:56 about the stock market and that was when
67:58 the conversation became serious anyone
68:01 trying to throw doubt on the reality of
68:03 this Promised Land found himself being
68:04 attacked as if he had blasphemed about a
68:06 religious Faith or love of country end
68:09 quote and nothing encapsulated the mood
68:11 of the times quite like an article that
68:13 appeared in Ladies Home Journal in
68:15 August of 1929 entitled everybody ought
68:18 to be rich in it the famous businessman
68:21 John J rasop told the American public
68:23 that the secret to wealth and security
68:26 could be found in the stock market his
68:28 argument summarized by one historian was
68:30 that quote $15 a month wisely invested
68:34 would make them wealthy within 20 years
68:36 except perhaps that 20 years was a long
68:38 time to wait end quote what raskob
68:41 failed to mention was that this easy
68:43 path to wealth was built on the
68:44 assumption that the market would never
68:46 fall or correct for the next two decades
68:49 there were some naysayers on the fringes
68:51 of the speculative orgy of course
68:53 financially comfortable Senators like
68:54 Tom hefin of Alabama Tut tutted from the
68:57 sidelines quote Wall Street has become
68:59 the most notorious gambling Center in
69:01 the whole universe the hot bed and
69:03 breeding place of the worst form of
69:05 gambling that ever cursed the country
69:07 end quote Harper's magazine cautioned
69:09 that Wall Street was no place for
69:11 amateurs reporting that the market was
69:13 quote becoming a Children's Crusade not
69:16 an adventure for a few hard boned nights
69:18 a place for the Butcher and The Barber
69:20 and the Candlestick maker but opinions
69:22 like that were in the minority most felt
69:25 that America was on the cusp of a new
69:26 era of unprecedented Prosperity it
69:29 wasn't gambling to bet big on the bright
69:31 future of America as the New York Daily
69:34 Mirror wrote that same year quote the
69:36 prevailing bull market is just America's
69:38 bet that she won't stop expanding that
69:41 big Ideas aren't petering out that
69:43 ambition isn't tiring in the wings that
69:45 tomorrow is twitching with growth pains
69:48 graph hounds chart waivers and statistic
69:50 quoters May shout their pins horse with
69:52 contrary sentiment Financial Jeremiah
69:55 May Rave of days of Doom but these
69:57 minority reports are drowned by the
69:59 harion ticker tape and the swish of
70:01 skyrocketing Securities we are gambling
70:04 on continued Prosperity Full Employment
70:07 and undiminished spending capacity on
70:09 freight loadings automobile output radio
70:12 expansion on Aviation development crop
70:14 yields beef prices on small order sales
70:17 and sound retailing end quote anybody
70:20 with lingering doubts just had to listen
70:22 to The Sunny Proclamation of recently
70:24 elected president Herbert Hoover
70:26 privately the president was very
70:28 concerned about the stock markets
70:30 astronomical and in some ways
70:31 nonsensical rise but on the campaign
70:33 Trail in 1928 he had assured voters that
70:36 quote we in America today are nearer to
70:38 the final triumph over poverty than ever
70:41 before in the history of any land the
70:44 poor house is Vanishing from among us we
70:46 shall soon with the help of God be in
70:48 the sight of the day when poverty will
70:50 be banished from this earth end quote
70:54 even pop culture reflected the
70:55 effervescent exuberance of the times the
70:58 number one hit song of 1929 was entitled
71:00 blue skies the lyrics of which were
71:02 quote blue skies smiling at me nothing
71:06 but blue skies do I see bluebirds
71:08 singing a song nothing but bluebirds all
71:11 day long never saw the sun shining so
71:14 bright never saw things going so right
71:16 noticing the days hurrying by when
71:19 you're in love my how they fly but while
71:21 most Americans saw blue skies ahead said
71:23 there were a few who sensed dark clouds
71:26 on the horizon in the late summer of
71:28 1929 Jesse Livermore was 52 years old
71:32 the farmer's son who had made his name
71:34 on Wall Street as the boy traitor had
71:36 not been a boy for a very long time age
71:39 had accentuated his weak chin and dled
71:41 his eyes forcing him to adopt thick
71:43 round glasses his strawberry blonde hair
71:46 had faded to a receding yellow even
71:48 Jesse's unquenchable womanizing was on
71:50 the way his Rocky marriage to dosi had
71:53 been Li limping along for 10 years but
71:55 it was on life support and in an effort
71:57 to save it they had both agreed to stop
71:59 indulging in their respective addictions
72:01 cold turkey Jesse promised he would stop
72:04 cheating and dosi promised she would
72:06 stop drinking despite all their problems
72:09 they did love each other and they were
72:10 tired of hurting one another and this
72:12 was a last ditch attempt to salvage
72:14 their marriage from an inevitable
72:16 implosion so Jesse came home every night
72:18 like a model husband and the two played
72:20 house as best they could trying to
72:22 suppress the thoughts creeped into their
72:24 minds as they went to bed Dotsy dreaming
72:26 of the whiskey bottle hidden in the
72:28 pantry and Jesse fantasizing about the
72:30 names in his little black book for the
72:32 sake of their marriage and their two
72:33 kids they would try their best to make
72:35 it work but there were other things
72:37 racing through Jesse livermore's mind
72:39 that summer the stock market's
72:41 spectacular run had made rich men like
72:43 Jesse even richer just like his early
72:46 days at the Boston Brokerage he had
72:48 impeccable timing and a spidey sense for
72:50 which stocks would dip which would climb
72:52 and when they would do do it and now
72:54 that spidey sense was telling him that
72:56 something was seriously wrong with the
72:59 stock market he couldn't quite put his
73:01 finger on it but he had a hunch
73:03 something very very bad could happen
73:06 with this seemingly Unstoppable market
73:08 and it might happen very soon it was in
73:11 his words quote a jigsaw which did not
73:14 have all the pieces end quote but unlike
73:17 the famous fortune teller of angelene
73:19 Adams Jesse Livermore didn't rely on
73:21 crystal balls and tarot cards the next
73:23 morning he hopped in his yellow
73:25 Rolls-Royce and had his chauffeur take
73:26 him to his massive Command Center above
73:29 Fifth Avenue he walked past the doorman
73:31 and whisked up the elevator to the 18th
73:33 floor and it was already buzzing with
73:35 activity his staff of 60 Traders
73:38 statisticians analyst and typist all
73:40 handpicked by Livermore were hard at
73:42 work livermore's investigation into the
73:44 health of the market had begun months
73:46 earlier in the spring and his staff was
73:48 very much up to the task as biographer
73:50 Tom Ruban writes quote his research team
73:53 team was vastly Superior to that of the
73:55 US government or even that of JP Morgan
73:58 Livermore led the team personally and
74:00 knew that his information was better
74:01 than almost anyone else's in America end
74:04 quote as they aggregated more and more
74:07 data and research it became clear to
74:09 Livermore that a massive correction
74:11 maybe even a crash was on the horizon it
74:14 was just a matter of when and how bad
74:16 there were hints at this crash hiding
74:19 beneath the surface seemingly unrelated
74:21 events that converged like pieces of red
74:23 string towards Jesse's conclusion in
74:26 London a powerful British industrialist
74:28 had just been arrested for criminal
74:29 fraud American Real Estate development
74:32 and steel production had not risen at
74:34 all in the previous month the bank of
74:36 England was bleeding its gold reserves
74:38 dry American Automobile production was
74:41 down in a booming economy which was
74:43 extremely odd plus the stock market was
74:45 filled with millions of inexperienced
74:48 investors minnow who were investing
74:50 blindly on borrowed money as Jesse
74:52 observed OB ered quote a get-rich quick
74:55 scheme is being played at an
74:56 increasingly Breakneck speed Across
74:58 America it is a new national sport that
75:00 can be played for the price of an
75:02 evening paper end quote all of these
75:05 factors coalesced in Jesse livermore's
75:07 mind he could see it just like he could
75:09 see the patterns in the prices as a
75:12 14-year-old kid going from bucket shop
75:14 to bucket shop with his trusty notebook
75:16 events were at a decisive stage he said
75:19 something big was clearly coming and
75:21 when it happened he was going to be
75:23 ready on September 2nd 1929 while Jesse
75:27 Livermore and his staff were hard at
75:29 work assembling the jigsaw pieces of the
75:31 coming catastrophe America was taking
75:33 the day off it was Labor Day with record
75:36 temperatures as high as 95° on the East
75:38 Coast the beaches were packed with
75:40 hundreds of thousands of people from The
75:42 Hamptons to Coney Island and because it
75:44 was a national holiday the New York
75:46 Stock Exchange and all its little
75:47 cousins across the country were closed
75:49 for the day the tickers were silent and
75:52 the market was strong wrong the Dow
75:54 Jones Industrial Average was one day
75:56 away from a record high of
75:59 381.986
76:02 the record high had been 98 just as the
76:06 fortune teller evangelene Adams had
76:08 foreseen in her crystal ball the Dow
76:10 Jones had indeed climbed to heaven but
76:13 what no one in America or the rest of
76:15 the world knew not Jesse Livermore or
76:17 evangelene Adams not Herbert Hoover or
76:20 Homer the mailman was that while the
76:22 Labor Day weather was setting records
76:24 the stock market had two the Dow Jones
76:27 had just hit its peak this was the top
76:31 in the coming months the Roaring 20s
76:32 would finally boil over and send the Dow
76:35 Jones plummeting down and down and down
76:37 until it reached a rock bottom of
76:40 41.22 in 1932 for those doing the math
76:43 at home that is 89% of its value gone
76:48 and the stock market would not reach the
76:49 highs of 1929 for another 21 years
76:53 September 3rd 1929 was the day the music
76:56 stopped and nobody knew it yet Wall
76:59 Street would keep dancing for another 6
77:01 weeks but in late October investors
77:03 watched in disbelief as their profits
77:05 evaporated their savings disappeared and
77:07 their world collapsed in a few short
77:09 years many of those happy labor day
77:11 beachgoers would be standing in lines at
77:14 a soup kitchen it was the beginning of
77:17 the
77:18 end well guys that is all we have time
77:20 for today I hope you enjoyed part one of
77:23 what will be a three-part series on the
77:25 crash of 1929 this first episode was
77:28 really about establishing the cultural
77:30 context of the crash and the mood of the
77:32 times and meeting a few of the key
77:34 players involved specifically Jesse
77:36 Livermore next episode Jesse will return
77:39 but we'll also be expanding our cast of
77:41 characters quite a bit we're going to
77:43 peel back wall Street's candy coating
77:45 and take a look at kind of the rot
77:46 underneath the bad behavior and
77:48 predatory practices that contributed to
77:50 the 1929 crash we're going to examine
77:53 the sickness in the system and along the
77:55 way we'll meet a venal Rogues gallery of
77:57 liars cheats swindlers and husters but
78:00 it would be disingenuous to suggest that
78:02 bad things only happen because of bad
78:04 people there were good intentioned
78:06 people in the story as well tragic
78:08 figures who tried to make the world
78:09 better and ended up breaking it instead
78:12 and we'll meet some of them too so with
78:14 all that said goodbye for now and look
78:16 out for that next episode in the next
78:18 few weeks but before I go a quick favor
78:21 if you enjoyed what you heard today
78:23 please consider taking a quick second to
78:24 give the show a five-star rating or just
78:26 like a nice review on Apple podcast or
78:28 Spotify and if you really enjoyed what
78:30 you heard today and you'd like to
78:32 support the show you can join the small
78:34 but loyal crew of patrons on the show's
78:36 patreon and you can find that at
78:51 patreon.com/crashcourse way of saying
78:53 thank you when I have some downtime and
78:55 the extra material and of course feel
78:56 free to drop me a line on social media I
78:59 love hearing from you guys and all your
79:00 thoughts about the show and you can find
79:02 conflicted on Facebook Twitter and
79:04 Instagram there is a Tik Tok too but I'm
79:07 still not very good at it so fair
79:08 warning any who that's all for me but as
79:11 always and I know I say this every time
79:13 but thank you so much for spending your
79:15 valuable time with me and I'll see you
79:17 next time this has been conflicted
79:20 thanks for
79:21 listening
79:23 [Music]
79:38 welcome to anthology of Heroes the
79:39 podcast that explores the most pivotal
79:41 moments of history Through The Eyes of
79:43 those who lived it in this podcast we
79:45 don't spend our time recounting facts
79:47 and dates instead we follow in the
79:49 footsteps of national heroes Kings or
79:52 Ordinary People who lived and breathed
79:54 the moments that shaped our world we're
79:56 not hemmed in by eras Borders or
79:58 religions instead we seek out the tales
80:00 of those who defied the odds and fought
80:02 passionately for their beliefs whether
80:04 they're right or wrong is up to you to
80:06 decide from verking G's doomed Rebellion
80:09 against Rome to Oola's unshakable war
80:11 against the USA all the way up to the
80:14 inspiring soie ball concentration camp
80:16 Uprising in World War II each episode is
80:19 an immersive listening experience
80:20 blending music and sound effects to
80:22 really draw you into the story our
80:24 episodes go for about 45 minutes making
80:26 them perfect for your commute and are
80:28 crafted using a wealth of historical
80:30 sources which I list on our website if
80:31 you want to learn more I'm the host
80:33 Elliot Gates and I'm thrilled to have
80:35 you joining me as we uncover history's
80:37 hidden gems and illuminate The Faded
80:39 pages of our past look out for the
80:41 anthology of Heroes podcast on Spotify
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