Quoted from InvesTech Research February 19, 1999

Financial World (April 10, 1929)
"It may be well again to stress the all-important point that the Federal Reserve has it in its power to change interest rates downward any time it sees fit to do so and thus to stimulate business."

Financial World (June 26, 1929)
"DEFLATION is a disquieting word and has been bandied about rather recklessly of late until in the process of constant reiteration it has assumed the form of a threatening bogey."

Outlook & Independent (August 7, 1929)
"IN MANY WAYS this has been the most remarkably cheerful summer in recent financial history. The stock market speaks for itself. After the serious decline in May, prices of the leading securities have been marching steadily upward... This prosperity might be disquieting if it were accompanied by any of the symptoms of inflation."

The New York Times (August 24, 1929)

A Sidelight on Selective Buying

"While a group of stocks has enjoyed a very rapid run-up since last Spring, more than twice the number have dropped to new low points and appear to be neglected by all casual traders in stocks. It has been remarked that it is harder to get a low-priced stock up a point than it is to push a market favorite up 30 points."

The New York Times (Sept. 20, 1929 | Four weeks before the crash)

Hung on a Hair Trigger

"Possibly one of the most interesting market developments of the last few months is the moment-to-moment interest which customers of brokerage houses are taking in their securities. Time was when the customer who was carrying a few hundred shares of stock in his brokerage house was satisfied to glance at his evening or morning paper to see how his holdings stood. Now, in the words of one customer's man, the brokers are `run ragged' for quotations and reports on last sales of every stock on the list."
'New Names' Most Popular
"Investors and speculators alike appear keen for 'new names,' and the market appreciation of some of the favorably situated issues which have been introduced to traders in the last few days has been tremendous."

Business Week (October 19, 1929 | One week before the crash)

Business Outlook

"Now, of course, the crucial weaknesses of such periods -- price inflation, heavy inventories, over-extension of commercial credit -- are totally absent. The security market seems to be suffering only an attack of stock indigestion... There is additional reassurance in the fact that, should business show any further signs of fatigue, the banking system is in a good position now to administer any needed credit tonic from its excellent Reserve supply."

The New York Times (Sept. 1, 1929 | Two days before the final top)

The New Psychology

"One of the most striking features of the present chapter in stock market history is the failure of the trading community to take serious alarm at portents which once threw Wall Street into a state of alarm... Traders who would formerly have taken the precaution of reducing their commitments just in case a reaction should set in, now feel confident that they can ride out any storm which may develop. But more particularly, the repeated demonstrations which the market has given of its ability to 'come back' with renewed strength after a sharp reaction has engendered a spirit of indifference to all the old-time warnings. As to whether this attitude may not sometime itself become a danger-signal, Wall Street is not agreed."

Business Week (Sept. 7, 1929 | Four days after the final top)

Wall Street's Week

"As the Fall begins there is a tenseness in Wall Street. Its presence is undeniable. There is a general feeling that something is going to happen during the present season. Just what it will be, when it will happen or what will cause is anybody's guess."

S&P Crash Correlation - 3 Year   ----- 1927/9 ----- 1985/7   -----1997/9