It is difficult to obtain a copy of the best documentary which we have ever seen about the stock market crash of 1929. It was written by the award winning screenwriter Ronald Blumer, and produced by Middlemarch Films for WGBH Boston, and shown on the excellent PBS history series American Experience Its title is The Great Crash of 1929.
The last time we checked you could not buy a copy from PBS, and it's rarely shown on television, perhaps due to a lack of corporate sponsorship (lol). This might have changed but we doubt it. If it is ever shown again on PBS try to DVR or Tivo it, since it is exceptionally well made, informative, entertaining, and contains many insights into the people and the period that you rarely get to see anywhere else, especially in dry economic analysis. It captures the spirit of the time, the zeitgeist.
The documentary contains a significant amount of original photos, film footage, and personal commentary, arranged in the style that Ken Burns has perfected to bring to life so many other historic documentaries. There is a web site for it from PBS which you can visit by clicking here: The Great Crash of 1929. There is a transcript for portions of the film, and they make interesting reading if you cannot see the actual film.
We first saw this video when we were doing work in Silicon valley. An acquaintance at a high tech IPO gave us a VHS copy to watch, just prior to the Nasdaq Bubble bust of 2000. It inspired us to investigate many of the written sources cited in the film, including Sobel, Galbraith and Klingaman, and greatly enriched our understanding of this little understood period of American history. It also persuaded us to sell all of our stocks that represented much of our life's savings, a few months before their prices plummeted about 90%. It made a deep impression on us after that. It might make a similar impression on you now as well.
As George Santayana said, "Those who cannot learn from history are doomed to repeat it."
NARRATOR: Everything was not fine in 1929 with the American economy. It was showing ominous signs of trouble. Steel production was declining. The construction industry was sluggish. Car sales dropped. Customers were 
getting harder to find. And because of easy credit, many people were deeply in debt. Large sections of the population were poor and getting poorer.
Just as Wall Street had reflected a steady growth in the economy throughout most of the 20s, it would seem that now the market should reflect the economic slowdown. Instead, it soared to record heights. Stock prices no longer had anything to do with company profits, the economy or anything else. The speculative boom had acquired a momentum of its own.
NARRATOR: Wealthy investors would pool their money in a secret agreement to buy a stock, inflate its price and then sell it to an unsuspecting public...
Mr. ROBERT SOBEL (Historian): I would say that practically all the
financial journals were on the take. This includes reporters for The Wall Street Journal, The New York Times, The Herald-Tribune, you name it. So if you were a pool operator, you'd call your friend at The Times and say, "Look, Charlie, there's an envelope waiting for you here and we think that perhaps you should write something nice about RCA." And Charlie would write something nice 
about RCA.
A publicity man called A. Newton Plummer had cancelled checks from practically every major journalist in New York City.
Mr. NESBITT: Then, they would begin to -- what was called "painting the tape" and they would make the stock look exciting. They would trade among themselves and you'd see these big prints on RCA and people will say, "Oh, it looks as though that stock is being accumulated."
Mr. SOBEL: Now, if they are behind it, you want to join them, so you go out and you buy stock also. Now, what's happening is the stock goes from 10 to 15 to 20 and now, it's at 20 and you start buying, other people start buying at 30, 40. The original group, the pool, they've stopped buying. They're selling you the stock. It's now 50 and they're out of it. And what happens, of course, is the stock collapses." [and on a large enough scale, the stock market, and the regional or national economy].
We came to the conclusion back in 1999 that stock market crashes are by and large the end result of reckless credit expansion, lax regulation, and widespread corruption of the society by a like-minded group of individuals who turn society on its head for their own selfish and personal benefit. They don't need to have a plan, they don't even need to communicate. Its simply what they do, like musicians play music, and bakers bake, and painters paint. They are financial predators.
Of course there are willing fools and greedy individuals up and down the food chain. One only has to look at the current mortgage crisis to see how that happens. They do not intend it to end in ruin, but it seems that the leaders, the primary movers, always take it just one step too far, and lose control, and then step aside. 
Its not because they need the money. Its a pathology, a will to power, a need to be in control. They have great holes in their being, and they try to fill them with the most money, the most power, the most of everything. They feel the overwhelming need to be .... different, better, than everyone else. They join exclusive clubs, send their children to exclusive schools, drive exclusive cars, and do exclusive things to... exclude "the lesser men" whom they might view as potential servants, or useless eaters. And if they cannot excel by writing a great book, or performing great music, well, they can try to stand out by destroying and humbling everyone else by subverting the public good and the law.
We don't know why it is, but they always seem to cheat: in school, in business, in marriage. They think the laws are not for them, and relish breaking them, while using them to subvert the little people. And they always seem to have a father or mother they despise because they made them feel unworthy. In a way, for them its all just game, because being sociopaths they cannot feel the misery that they cause. They can feel very little actually, and are generally incapable of normal human love and friendship. So they try to feel something through excess and indulgence in drugs, dress, drink, cars, fads, marriages, houses. Incapable of a mature loving relationship, they oscillate between immature romance and impersonal sex. They are driven, and once you get past the public face, they are pathetic, rarely at peace, and often downright scary.
In 2005 we forecast that 2000-2 was a preview, and that they would do it all over again, and this time the country would not be getting up from it intact for many, many years. We think we're well on our way. May God have mercy on us.
Are the commodity markets in a pricing bubble? Many people's judgement tells them that they are, as they look at the short term price movements of certain commodities like gold, wheat, copper.
