That said, after doing some reading on the 1929 crash a few days ago I again went back and looked at the DJIA chart from max time. This time I held up a pen to see the line that it made if it moved up in a uniform fashion.
Yes, that's my hand holding my pen, taken with my phone. The pen is pointing at 6k. I had previously estimated 7500 so 6k now doesn't look much farther down. Here is a clearer image of the same chart showing the pen replaced by a green line. You should be able to click on it to see it full size.
Not very scientific, but I do think it is reasonable. What do you think? Based on the 29 crash we'll see a few more up days and some more rich people buying stocks to try and stem the red flow, but overall we are going to see a downward trend until the banks start to lend money again. If we start seeing a bunch of bankruptcies in big companies I think it will mean the banks will be even less likely to lend money (since they lost it) and we'll see the next tier of companies failing. Not much different than the housing market drying up. People could no longer refinance their houses and ended up defaulting. Companies will not be able to refinance their payroll and end up defaulting or cutting back. This is not a good place we have come to and I hope I'm wrong!
