Book: 1929 by Andrew Ross Sorkin is on my library hold even before being released
Posted By RichC on October 2, 2025
Likely, Andrew Ross Sorkin’s new book, “1929: Inside the Greatest Crash in Wall Street History and How it Shattered a Nation,” is not on my “must buy list,” but the Bloomberg pre-release review below (see archive.ph) has it sounding relevant and interesting. So like my buddy Jeff, I’ve put it on my library hold list and plan to discuss it over lunch, dinner or sitting on the back porch (a favorite thing to do).
What Andrew Ross Sorkin’s ‘1929’ Tells Us About Today’s Stock Market
Gary Sernovitz | 9/19/2025
There are two ways to read Andrew Ross Sorkin’s 1929, a new book on the stock market crash of that year. You can pop the popcorn and watch rich men twisting in the lies they tell themselves and others. Or you can read 1929 to match the stories Wall Street told itself then to those of today, a perversely fun project that Sorkin subtly leaves us to complete for ourselves. Both approaches are worthwhile. Neither will task your brain.
That’s because Sorkin, one of America’s highest-profile financial journalists — with twin seats at CNBC and the New York Times — does not seek to explain why the stock market fever rose and broke. It was FOMO plus debt. It’s almost always FOMO plus debt. Nor does he offer a counternarrative about how the mania could have been avoided. (“No matter how many warnings are issued or how many laws are written,” he writes, “people will find new ways to believe that the good times can last forever.”) He isn’t trying to explain the Great Depression, or whether the crash caused it.
But in the current moment, when so much feels (and is!) unprecedented, Sorkin’s greatest accomplishment is allowing us to relive precedent by re-creating how the market felt in 1929, week by week, sometimes day by day, to those experiencing it as its own thing before they knew how it would live on in history.
Ironically, for a book called 1929, this means making 1929 feel less unusual. Yes, the Dow Jones had almost doubled in a year by its September 1929 peak. (Our rallying S&P 500 is up “only” 73% since the start of 2023.) Yes, shares fell 11% in aggregate in late October 1929 across dramatically volatile days: Black Thursday, Black Monday, Black Tuesday, etc. Yet the sum of all this movement was that the Dow was down only 17% in 1929. There were no major bank failures or big corporate bankruptcies that year. Suicides were down slightly. “The stock market crash,” Sorkin writes, “didn’t even rate as The New York Times’ most important news story of 1929.” That was Richard Byrd’s flight to the South Pole.
‘A Relentless Unraveling’
Part of the national nonchalance was that the stock market had been down 33% eight years earlier, in 1921, before beginning a long bull run. And in early 1930 the market recovered half of the value lost from 1929.
Then things got bad. “The collapse was not a moment,” Sorkin explains. “It was a relentless unraveling.” The Dow was down a third by the end of 1930, he notes. It fell by half in 1931. By 1932 it was down 80% from the 1929 peak. The explosion of bank failures started in late 1930, alongside the terrible unemployment, the breadlines, the Depression.
“No matter how many warnings are issued or how many laws are written, people will find new ways to believe that the good times can last forever.”
This non-teleological reading of 1929 helps us complete Sorkin’s implicit project: filling in the comparisons to today. Market manias come from somewhere; they are “excellent fundamentals euphorically extrapolated,” in the words of fund manager Jeremy Grantham. Both then and now, the source was technology. To crib from Robert Shiller’s Irrational Exuberance, the 1920s saw breathtaking adoptions in electrification, vacuum cleaners, washing machines, talking movies (invented in 1923), automobiles (from 1.7 million in the US in 1914 to 23.1 million by 1929) and radio broadcasting (from three stations in 1920 to 500 by 1923). RCA was the Nvidia Corp. of its day, up from $1.50 in 1921 to $85.50 in 1928.
People were getting rich off shares like that, attracting more people to the market. Everything could be seen as a reason to buy, including the 1929 inauguration of a new president. Sorkin quotes Bertie Forbes (founder of Forbes) observing: “Isn’t this kind of funny? You will recall that the newspapers told you before the presidential nominations that Wall Street didn’t want [Herbert] Hoover. Now Hoover’s inauguration is hailed by Wall Street as calling for a wild demonstration of bullish exuberance!”
1929 certainly contains some evidence of mass exuberance: kitchen staff watching a basement ticker tape in a banker’s Washington Square mansion; designated lounges and galleries where women “could watch the fluctuations of the market safe from the rowdiness of men buying and selling.” But 1929 is primarily a view of the top, with research from the archives of the Federal Reserve and the papers of the leading bankers of the age.
Those elite voices were, for the most part, not dumbly caught up in the mania. Some, like Charles Merrill of Merrill Lynch, advised clients to get out in 1928. Even those who remained invested mainly did two things at once: accepted that the market wasn’t acting right and maintained the twitchy desire to dance for one more song before the music stopped.
Some of this is the usual stuff. Private equity’s present-day efforts to open up 401(k) plans to its funds seem to echo the exhortation of “Sunshine Charlie” Mitchell, chief executive officer of National City Bank (now Citigroup Inc.), when his bond salesmen complained that they had run out of buyers: “Look down there,” he said, pointing to the Manhattan streets below. “There are six million people with incomes that aggregate thousands of millions of dollars. They are just waiting for someone to come to tell them what to do with their savings. Take a good look, eat a good lunch, and then go down and tell them.”
Some of the selling in 1929, however, was not the usual stuff. The men featured in Sorkin’s book, usually Ivy League establishment WASPs, come across as smug, priggish and unshakably self-righteous. They engaged in behavior that you could not get away with today, and — frankly — that they knew was shady even then. Just one example: Elite investors and bankers would form investment pools to “paint the tape” by trading with one another to generate enthusiasm for a stock before selling into the froth.
Or there were schemes like this one, by Thomas Lamont of J.P. Morgan & Co.: The bank took public a Cleveland-based “teeter-tottering empire of bonds and preferred shares” called Alleghany (a company that survived until Warren Buffett bought it in 2022). “To the general public,” Sorkin explains, “Alleghany shares were priced at $35, which Lamont knew would sell easily in the rising stock market. Morgan partners, however, were able to buy them at a secret price of $20 a share…. Seizing the opportunity to spread goodwill, Lamont then went around to ‘friends of the firm’” — retired heroes such as Calvin Coolidge and Charles Lindbergh — “and offered them the same discount.”
That heads-I-win, tails-you-lose was even more egregious than this decade’s grubbiness with special purpose acquisition companies. And it was done not by the Chamath Palihapitiya of 1929 but by its Jamie Dimon.
‘Almost Divine Prescience’
Sorkin amps up the excitement as the October 1929 crash approaches. The similarities to the present day — with its record highs and melt-up warnings — sharpen. During 1929, the Fed, not yet 16 years old, raised the discount rate to 6%, compared with 3.5% at the start of 1928, and publicly discouraged banks from lending to “speculators.” (Mitchell’s response: Have National City extend margin debt to investors far and wide.) Of Hoover, Sorkin writes: “On entering the White House, he knew the economy had been running too hot for too long and he tried to make that case to Wall Street, Congress, and the nation. Unable to gain any traction, however, he gave up and turned to other matters.” On Black Thursday, the major banks and others pooled $250 million to buy 37 of the most vulnerable stocks. The move was “to little effect.”
“Could the 1929 crash have been avoided?” Sorkin asks. “The short answer is yes. There were plenty of opportunities to arrest the forces of speculation before they got out of hand. The long answer is that it would have taken almost divine prescience to look beyond the short-term incentives for making money and focus instead on the long-term consequences.” The crash came because shares were volatile all year. The fear of missing out on the opportunity to buy tipped into the fear of missing out on the opportunity to sell.
The last third of 1929 leaves Wall Street — and 1929 — for the courthouse and Washington. Here the differences from today are most acute. Federal intervention in the economy was muted, first because of Hoover’s politics and then because of jockeying with Franklin Roosevelt. The lack of intervention, in contrast to our current situation, wasn’t due to scarcity: The US ran a budget surplus in 1930.
Sorkin also lays out the similarities with our era. The Smoot-Hawley Tariff Act passed in 1930. Just as with the aftermath of the global financial crisis in 2008, there were not a lot of satisfactory people to prosecute for a crash that eventually ruined lives. A large part of the last section of 1929 focuses on Mitchell’s trial for a wash sale to book his large capital losses for the tax benefits. The sale was to his wife. Mitchell got off.
And, as with the 2008 crisis, a congressional probe revealed bad behavior. The Pecora Commission of 1932 had little power to punish, but it added to the political momentum leading to the establishment of the Securities and Exchange Commission and other reforms of Roosevelt’s first term.
History progresses, and we should not lose sight of that. The SEC exists. We are all Keynesians now, as Milton Friedman once said. David Solomon isn’t giving shares of Figma Inc. to LeBron James at 43% below the initial public offering price. Still, the primary lessons of 1929 seem fresh: that the mania couldn’t be easily contained, the correction couldn’t be non-divinely stopped, no one was really punished for things that mattered, and Wall Street lived to crash another day.
And also: We like reading books like 1929, maybe because it’s always enjoyable to puncture Wall Street’s self-regard. That, for one, never crashes.
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