Problems still abound, but the. The United States remains the oasis of the world
For the weekend reading, Navellier & Associates lead writer Gary Alexander offers the following commentary:
“The further back you can look, the more likely you are to see ahead.” – Winston Churchill
First Quarter 2022 Hedge Fund Letters, Talks and More
Old West returns 23% in first quarter betting on ‘boring’ companies
Hedge funds are bleeding red ink, but there is one company that continues to keep its head above water. Old West Investment Management, which offers both separately managed accounts and an investment partnership, posted a positive performance for the first quarter. Long-only split accounts added between 12% and 18%. By comparison, limited partner returns varied Read more
You rarely hear of “May crashes”, but the two worst crashes of the 19th century started in early May:
- from May 8 to 12 triggered the Panic of 1837 with the failure of several major banks. It was the most devastating economic depression in American history to that date, and it was primarily caused by President Andrew Jackson’s fetish for “balancing the budget.” Before leaving office two months earlier, in March, Jackson had written off the national debt and abolished the second largest bank in the United States, simply by not renewing its charter. The sudden lack of credit (or central bank) triggered a “liquidity crisis” that closed hundreds of banks and thousands of small businesses and farms, which were heavily dependent on their local banks. At one point, the New York militia had to be called in to maintain order on Wall Street. The Panic of 1837 lasted seven years, until 1844.
- May 1-5 was the opening week of the Panic of 1893, which lasted until 1895 and was only fully relieved by Klondike Gold. Surpassing 1837, it became the new “worst economic crisis in the history of the United States”. May 3 was Wall Street’s worst day in a decade. Call it “Black Wednesday” if you want. On Thursday, the panic escalated, with the bankruptcy of the National Cordage Company, the so-called “rope trust”. Most other industrial stocks – NASDAQ-style high-tech stocks at the time – also fell sharply, while most railroads barely held up for a while. By the end of 1893, over 600 banks had failed. Stocks plummeted, major railroads went into receivership, 15,000 businesses went bankrupt, and 20% of the workforce was unemployed by 1894, sparking labor strikes and mass national unrest.
A month earlier, on April 5, the New York Times posted one of those famous bad predictions: “It’s too early to say a bull market is upon us, but the numbers show the trend is up in price.”
In fact, it’s true: 1837 is just a “blip” and 1893-95 is hard to find in this long-term market chart:
The Dow Jones Industrial Index was only born in May 1896, but it has grown more than 900 times since thenfalling from an opening value of 40.94 to its recent high of 36,952.65.
Something else marked those depressions of 1837-44 and 1893-95, and that was a massive influx of new Americans to our shores, as well as westward expansion.. European political unrest and the Irish famine brought an avalanche of immigrants after the Panic of 1837-1844, then the persecution of minorities, especially Jews, drove millions more through Ellis Island, under the Statue of Liberty, from 1895 to 1910.
You would never know when our worst depressions were happening from this chart. Our greatest waves of human arrivals came during our “Panic of 1837” (circa 1850) and then from Eastern Europe in the 1890s. To put faces to those statistics, here’s a birthday tribute to four of those immigrants from the 1890s to the 1910s.
Two Austrian-Americans and two Russian-Americans make great music in movies
“A steppe is a steppe is a steppe… the steppes of Russia are very similar to the prairies of America.” – Film composer Dmitry Tiomkin (born in Ukraine, May 10, 1894)
Tuesday marks the birthdays of two great film composers born in Austria and Ukraine, as well as America’s first composer, born May 11 in Russia, and an Austrian-American who sang most of his songs first. They were all born between 1888 and 1899 and I feature them on my weekly radio show on Friday. They illustrate why America has always been the #1 oasis for freedom.. In order of birth:
- Max Steiner (born May 10, 1888, Vienna) was a child prodigy who reportedly studied piano under Brahms and conducting under Mahler, but soon grew weary of European anti-Semitism and patronage, so he first emigrated to London, then New York, and finally Hollywood, where he practically invented modern film music, starting with “King Kong”, then “Gone with the Wind” and over 300 films in total.
- IrvingBerlin (born May 11, 1888 in Russia) arrived in America at the age of 5 after an arduous six-month journey by land and sea after the Cossacks burned down his village. In his beloved America, he cornered the market for patriotic and holiday songs and had a long and successful working relationship with Fred Astaire (below). Berlin (and Astaire’s father) both entered the United States at the start of the Panic of 1893. He set the Statue of Liberty poem to music and donated God Bless America royalties to Boy Scouts .
- Dmitry Tyomkin (born May 10, 1894, in central Ukraine) was also Jewish, therefore subject to the swords of the Cossacks, then to the censors of Lenin, so he fled to Berlin, where the worst anti-Semitism led him to Hollywood, where he started writing scores for all those Frank Capra movies that glorify America, like “It’s a Wonderful Life” and “Mr. Smith Goes to Washington,” but his biggest scores came from the breadth of the West (like “High Noon” or “Giant”), which sounded like Ukraine. One of his last songs, taken from “Alamo”, recalls the plight of Ukraine today: about crops left unplanted by farmers who risk death to defend their homeland: “The green leaves of summer”.
A right time to plant, a right time to plow.
A time just to live, a place to die.
It was so good to be young then, to be close to the earth,
Now the green leaves of summer are calling me home.
- Fred Astaire (born Frederick Austerlitz, May 10, 1899) brought more Great American Songbook to Americans than any other singer, although he was first and foremost a dancer. His life depended on the key decisions of his father, also named Frederick, who was born in the suburb of Linz, Austria, where the Hitler family lived. His Jewish parents had converted to Roman Catholicism. The elder Frederick made his way to America, to Omaha. Otherwise, his children would have grown up close to the Hitler clan. Fred brought the music of our greatest Jewish composers (like Irving Berlin, George & Ira Gershwin, Jerome Kern and Arthur Schwartz) to the ears of the world as Hitler condemned them. (Aryan) Johanna (Anna) Geiluswho married Frederick Austerlitz (the eldest) when she was just 16, in Omaha, and became the gentle and patient stage mother of young Fred and his older sister Adele, taking them to New York when they were five and seven years old, working to put the kids in the best dance schools, then tutoring them in the evenings.
A time capsule from 85 years ago, May 6-7, 1937: an airship explodes… then a boiler room in black and white
“The world is in shambles. With politics and taxes, and people grinding axes, there is no happiness… – Ira Gershwin, May 7, 1938
On Friday evening, May 6, 1937, the 804-foot-long airship Hindenburg, adorned with a swastika, burst into flames over Lakehurst, New Jersey, killing 36 people. Suddenly ocean liners seemed like a much safer way to cross the Atlantic.
The next day, Saturday, May 7, “Shall We Dance” opened in theaters across America, with Fred Astaire and Ginger Rogers aboard an ocean liner. One of the first Gershwin songs that Fred sings is in the boiler room with a dozen black workers and singers: “Slap That Bass”.
Imagine this half-Jewish dancer from Hitler’s hometown singing a song by a pair of Jewish brothers with a built-in cast of a dozen black musicians.
The song begins: “The world is in shambles. With politics and taxes, and people grinding axes, there is no happiness…. Fred responds: Dictators would be better off if they ‘zoomed in/zoomed out’ every once in a while. – Lyrics by Ira Gershwin in “Slap That Bass”, from Shall We Dance, 1937
Yes, the world was a mess: The Dow was in a terrible second decline in the 1930sfalling 33% in 1937 and 49% from March 10, 1937 (Dow 194.4) to March 31, 1938 (Dow 98.95), but then increased tenfold in 30 years, reaching 985 in 1968. The world is always a mess, but there is always a morning and music.
In the context, that The 1938 low was well above the 1932 low (Dow 41) and the long-term recovery quickly resumed.
A year earlier, on June 19, 1936, a young black American heavyweight, 22-year-old Joe Louis, lost to 30-year-old former German champion Max Schmeling in a 12th-round knockout at Yankee Stadium. Then, in August, the Berlin Olympics were designed to show off the superior German race, but Ohio’s Jesse Owens, also 22, won four gold medals.
George Gershwin and Fred Astaire first met when they were 15 and vowed to do shows together. Their first show started on Broadway in December 1924: “Lady Be Good”. The same week, Hitler walked out of Landsberg prison with his “Mein Kampf” ready to be printed. America’s Shining Shores Saved the Lives of Millions Like Fred and George. If George and Fred’s parents had not worked up the courage to leave Europe in the 1890s, despite a “panic” in our markets, their films and music would not exist and they would likely be killed by Hitler. It turned out that Gershwin died of a brain tumor in July 1937, but his music will live forever. America was their oasis.
As for Joe Louis, he defeated Max Schmeling in a highly publicized rematch in 1938 at Yankee Stadium, in Joe’s fourth heavyweight title defense, as white and black Americans cheered on the “Brown Bomber.” American on their radios.
Only in America.