Henry Clews lived from 1836-1923 and wrote several books on his views and experiences on Wall Street, including “The Wall Street Point Of View” and “Fifty Years in Wall Street.” Here’s a quote that seems to sum up very succinctly and without emotion what we are going through now:
“The action of commerce, like the motion of the sea or of the atmosphere, follows an undulatory line. First comes an ascending wave of activity and rising prices; next, when prices have risen to a point that checks demand, comes a period of hesitation and caution; then contraction by lenders and discounters, and then a movement, in which holders simultaneously endeavor to realize, thereby accelerating a general fall in prices.”
“Credit thereupon becomes more sensitive and is contracted; transactions are diminished; losses are incurred through the depreciation of property, and finally the ordeal becomes so severe to the debtor class that forcible liquidation has to be adopted, and insolvent firms and institutions must be wound up. This process is a periodical experience in every country, and the sharpness of the crisis that attends it depends chiefly on the steadiness and conservatism of the business methods in each community affected.”
What we are going through now is no different than what other generations experienced. We are probably better off because we have more of a social safety net and an activist government to smooth the rough edges of this downturn.
