Reflections on Sorkin’s 1929

When Andrew Ross Sorkin released 1929, it immediately landed on my reading list.   I am a fan of his previous book about the global financial crisis of 2008, Too Big to Fail, and looked forward to reading his perspective about this pivotal period in our country’s history.

It is, indeed, an incredible read.  It clearly illuminated for me the series of events and people who were most deeply involved.  Obvious spoiler alert - the story does not end well.

With great admiration for the book’s character development, three of my main take aways are:

1. It is generally difficult to be sympathetic to the leaders of Wall Street at the time, many of whom ended in personal financial distress. While they did not intend for the collapse of the stock market to occur, they capitalized on the financial opportunities available to them with no apparent concern about the impact to the public, including their clients. Some of their actions are stunning because they are so clearly prohibited now, and it is hard to imagine a time when they were allowed.
2. The book is focused on the animal spirits of Wall Street rather than the ensuing Great Depression or the devastation to the ordinary citizen.  The manner in which credit was extended liberally to individuals for speculation in the stock market was certainly to the benefit of the banks, at least in the short run. The struggle between Washington and Wall Street was real.  Other strategies and insider tactics were employed which, in today’s world, would at a minimum be considered unethical. While we bristle now with feelings of being overregulated, this is a clear reminder of what can happen when no guardrails exist.
3. While I was aware of the years following 1929 as producing tremendous economic devastation to so many, I had not previously focused on the trends of the stock market in the subsequent years.  I mistakenly believed that most of the damage to the market was done between October 27, 1929, and shortly thereafter.  In fact, the market had periods of hopeful bounce backs followed by drops to even lower levels, with an overall trajectory downward for three painful years.  The bottom was not reached until July,1932. The recovery, of course, took much longer and a full rebound did not occur until the early 1950s.  We are accustomed to lesser drawdowns with relatively short recovery periods, but the aftermath of 1929 was far different.  

I found 1929 to be a fascinating book and the product of intense research.  It also served as a reminder to remain optimistic while keeping eyes wide open for warning signs of excesses, however they may present themselves in today’s world.

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