"As the advertisements in the Ladies Home Journal declare, "This is a sun-worshipping year....all the world has gone in for sun-tan." (Since Yesterday by Fredrick Lewis Allen.) The July 6th 1929 cover of The Saturday Evening Post would also agree:

The 'Bob' Indicator

This year, Victoria Beckham, Hollywood's new 'it' girl (pictured below), has a style reminiscent of the overly tan short-haired woman from the summer of 1929. Late last year, she and pop singer Rihanna returned to the 'bob' hairstyle, made famous in the 1920s. It is now fashionable in the U.S. and U.K. The 'bob' also appeared in the early 1960's in the final stages of that boom after being reintroduced by a young hairstylist named Vidal Sassoon.

The Peak

Continuing with a quote from Since Yesterday, we have overlaid recent news links with Allen's description of September 3, 1929, (the day the Great Bull Market peaked) to complete the historical/economic metaphor:

"You will not be able to go far, in the central part of any of the big cities, without hearing the deafening clatter of riveters, for although the Florida boom went to pieces in 1926, and the boom in suburban developments-which has been filling up the open spaces in the outskirts of the cities with Cotswold Terraces and Rosemont Groves and Woodmere Drives-has been lagging since 1927, the boom in apartment-house construction and particularly in office-building construction is still going full tilt. Not in the poorer districts are the riveters noisiest, but at the centers of big business and of residential wealth, for it is the holders and manipulators of securities who are the chief beneficiaries of this last speculative phase of Coolidge-Hoover prosperity."

Credit Crunch

As shown in our latest (subscribers-only) Investment Analysis Report: Credit Downturn Force Feeds Wall Street Banks With Losses, the credit crunch that we have been warning about has begun. Bloomberg News recently produced a video that provides sobering commentary on the outlook of the credit market. As the credit crunch spreads, forced selling and unwinding of leverage on assets will occur.

History Homework

Only Yesterday: An Informal History of the 1920's by Fredrick Lewis Allen is provided online by the American Studies at the University of Virginia. We highly recommend reading Chapters 11 through 14, which detail the Florida real estate bubble in 1926 and the stock market bubble of 1929.