My Review of Andrew Ross Sorkin's "1929"

 The Great Crash and its Aftermath

Andrew Ross Sorkin of CNBC, DealBook, and “Too Big to Fail” fame has written a riveting history the 1929 stock market crash and its aftermath through the eyes of many of its key participants. His writing style puts you in the room with the leading players of the day as they experience the exuberance of the boom and then grapple with grinding bear market that followed. It would have helped if there were an annotated chart of the Dow Jones Industrial average from 1929-1933.

His leading players are “Sunshine” Charlie Mitchell, president the National City Bank and its securities affiliate the leading underwriter of new issues in the 1920’s; Thomas Lamont, the de facto head of J.P. Morgan; Jack Morgan, J.P.’s son and nominal head of the bank; Russell Leffingwell,  a Morgan partner and a founder of the Council on Foreign Relations; Albert Wiggins, president of the Chase National Bank; Jesse Livermore, legendary trader who made $100 million in the crash; Owen Young, president of General Electric and author of the Young Plan for German reparations; John Jacob Raskob, General Motors director, chairman of the Democratic National Committee and developer of the Empire State Building; William Crapo Durant, General Motors founder and leading speculator; Senator  Carter Glass, coauthor of the Federal Reserve Act of 1913 and the Glass-Steagall Act of 1933 and a leading critic of Wall Street speculation;  and Ferdinand Pecora, counsel to the Senate Banking Committee taking on the WASP establishment by investigating Wall Street. We also have cameo appearances of the financier and advisor to presidents Bernard Baruch, and Winston Churchill who was out of government and was speculating in the U.S. stock market, and David Sarnoff, president of RCA, the NVIDIA of its day.

 

The stock market of the 1920’s was the wild west where “pump and dump” pools operated, and insider trading was legal. It was not unheard of for insiders and their friends to receive newly issued stock at a discount from the official offering price. All the while margin was freely available where stocks could be purchased with only 10% of the cash payable upfront. The availability of margin was funded by the call money market at interest rates of up to 20%. It was the call money market that sucked in funds from all over the country, and for that matter the world, to earn high returns. However, this form of leverage could be withdrawn on moment’s notice thereby triggering a liquidity squeeze.

 

I learned a few interesting factoids to comment on. I didn’t know that David Sarnoff was actively involved in the Young Plan negotiations. Perhaps more interesting, I didn’t know that Mitchell of National City and Wiggins of Chase actively lobbied Carter Glass to include J.P. Morgan, as a private bank, in the separation of commercial banking from investment banking. It seems that Glass was close to Morgan partners Lamont and Leffingwell. Thus, any allusion to Glass being the Elizabeth Warren of his day hardly rings true.

 

As someone who has read every front page of The New York Times from August 1929 to March 1933 and has read widely on the subject of the crash and its aftermath, I have a few issues to raise with Sorkin. The first is that the depression was not an inevitable result of the crash. It occurred against the backdrop of inept monetary policy followed by the Fed and more important it was caused by the imbalances caused by World War One rubbing against the rigidities of the gold standard. Thus, the root causes were not domestic in origin as Roosevelt argued, but rather international in origin as Hoover argued. Thus it was no coincidence that the Dow Jones Industrial Average bottomed in June 1932 just when the Lausanne Conference was agreeing to drastic cuts in German reparations payments and the suspension of payments on inter-allied debts. 

 

Sorkin should have read Tobias Straumann’s “1931” where he quoted the 1932 Annual Report from the Bank of International Settlements as follows: “In the circumstance of the German problem- which is largely responsible for the growing financial paralysis of the world – call for concerted action Governments alone can take.”  (See: https://shulmaven.blogspot.com/2019/07/my-amazon-review-of-tobias-straumanns.html ) It was the very Young Plan that Lamont helped to negotiate that made Hitler. His attacks on the Young Plan which stretched out the German reparations to schedule to 1989 and made the payments more rigid, was one of Hitler’s leading campaign issues that gave his Nazi Party 19% of the vote. The prospect of future Nazi victories led to a capital flight from Germany and Austria.

 

I wish Sorkin would have spent more time on what his players were doing in June 1930 when Hoover signed the Smoot-Hawley Tariff Act. The day after Hoover announced that he would sign the bill the Dow Jones Industrial Average plunged 8%, its worst day of 1930.  ( See: https://shulmaven.blogspot.com/2025/04/a-broken-stock-market-and-broken-trust.html ) The Times highlighted the new tariff regime would make it harder for Germany to make it reparations payments and for Britain and France to pay its war debt to America.

 

I also wish that Sorkin were in the room when Britain devalued the Pound and left the gold standard in September 1931, the worst month in stock market history. In response to the fears of a gold outflow, the Fed raised its discount rate from 1.5% to 3.5%. That action was a dagger into the heart of the economy.

 

Thus, in my opinion, the triggers of the Great Depression came in the form of a three-act play. The first was the stock market crash of October 1929, and the second was the signing of the Smoot -Hawley Tariff Act in June 1930. The third and final act occurred when the Fed raised the discount rate in September 1931.

 

My last quibble is that Sorkin used the wrong source for his comments on the interregnum period between the Hoover and Roosevelt administrations. He cites  Eric Rauchway’s “Winter War” which is way too biased against Hoover. (See: Shulmaven: My Amazon Review of Eric Rauchway's "Winter War: "Hoover, Roosevelt and the First Clash Over The New Deal" ) A more balanced account by  Jonathan Alter, a serious liberal, in his “Defining Moment” noted that it was  Hoover treasury department officials, namely Ogden Mills and Arthur Ballentine whose drafts ultimately became  the Emergency Banking Act in March 1933 thereby ending the third banking crisis of the depression.

 

All quibbles aside, Andrew Ross Sorkin has given us a new take on the elements and personalities involved in the crash and its aftermath. Can it happen again? In my opinion, yes. All it takes is human greed combined with lots of leverage accompanied by institutional rigidities and incompetent regulators.

Rage and Silence From the So-Called Peace Camp

 While most of the world looked hopefully on the ceasefire between Israel and Hamas, two of the most vocal callers for a ceasefire reacted either with rage or silence. (See: https://shulmaven.blogspot.com/2025/10/free-at-last-now-hard-part-begins.html ) Students for Justice in Palestine (SJP) applauded Hamas' slaughter of innocent Palestinians and further encouraged them to remain armed. Hopefully their fellow travelers in the West will realize that they have been conned and that the western media will wake up to the fact that Hamas has no compunction about killing their fellow Palestinians. 

Instead of raging at the ceasefire, Jewish Voice for Peace (JVP) has been remarkably silent. Recall that this organization attempted to shutdown Grand Central Station in the name of a ceasefire. Well, they got their ceasefire. Then why the silence? The answer is simple. JVP is fundamentally a left wing group seeking the destruction of Israel as a  Jewish state. Israel winning is anathema to them. They care more about their solidarity with the Left then with the Jewish people and it why they will remain silent about Hamas killing Palestinians.  Shame on them.

Free at Last: Now the Hard Part Begins

After two long years Hamas has finally freed the last twenty live hostages left in the dungeons of Gaza. With the captives being redeemed and an Israeli-Hamas cease fire in place, there is much to celebrate. Nevertheless, we should not lose sight of the very difficult tasks ahead. (See: https://shulmaven.blogspot.com/2025/10/the-israel-hamas-war-is-peace-at-hand.html )

As I write this Hamas gunmen are slaughtering their local Palestinian opponents. This has to stop and if Gaza is to be rebuilt by the proposed middle eastern consortium, Hamas will have to be disarmed. That will not be easy and what Arab state will allow their soldiers to be killed in a Gaza peace keeping mission?

In order for this to work is for the United States, Egypt, Qatar, and Türkiye have to put constant pressure on both Hamas and Israel to maintain the momentum of today. There are few hopeful signs. It appears that there is a new openness to expanding the Abraham Accords and that Indonesia, the country with the largest Muslim population, is prepared to commit troops. President Trump and his team have created the framework for a new beginning in the middle east; let us hope they will have the patience to follow through in the days to come.

My Review of Yaakov Katz's and Amir Bohbot's "While Israel Slept"

Confirmation Bias

Veteran Israeli journalists Yaakov Katz and Amir Bohbot have put together a well-sourced and deeply researched indictment of the vaunted Israeli intelligence services and Prime minister Binyamin Netanyahu in their failure to anticipate the deadly Hamas attack of October 7, 2023. In the bluntest of terms, they were guilty of confirmation bias in which their tunnel vision refused to see the signs of the coming attack by Hamas.

 

They thought Hamas was interested in growing the Gaza economy and the intelligence services had their attention centered on Iran, Hezbollah, and the West Bank. They refused to believe reports coming from the Gaza watchers on the border and, in fact, they did not have a single spy on the ground in Gaza. They relied too much on technical superiority, rather than human intelligence.

 

Hamas, on the other hand had excellent intelligence on what the Israeli’s were up to. They know where the cameras and sensors were, and they knew down to the minute details where troops were stationed and where the safe rooms of the nearby kibbutzim were located.

 

Katz and Bohbot pull no punches in describing the ideology of Hamas. Simply put, Hamas is a terrorist organization dedicated to the destruction of Israel. They do not believe in the so-called two state solution. They believe on one state that does not include the Jews of Israel. Why gullible westerners support such barbarism will be the topic of another blog.

 

The authors highlight the huge military buildup that was taking place in Gaza. Starting with the Morsi regime in Egypt which smuggled in weapons manufacturing and construction equipment in 2012. That enabled Hamas to produce heavy weapon and to construct a labyrinth of tunnels underneath Gaza. Israel has no idea as to the full extent of Hamas’ underground city.

Indeed, Hamas war using western and Arab aid to build a war machine. Further they invested some of that aid into a host of front companies to generate income. One of those companies was actually listed on the Istanbul Stock Exchange.

 

Nevertheless, there were warnings. In 2016 the defense minister urged a pre-emptive strike on Gaza. That was turned down out fear of high casualties. Israel’s 2014 incursion into Gaza did not go as well as planned with casualties far higher than expected.

 

Among the many recommendations Katz and Bohbot recommend are:

·      * Establish a Director of National Intelligence to coordinate the various security agencies. I would also create a Team B to critique the DNI conclusions.

·     *  Create a Department of Informational Warfare. Hamas propaganda has been running rings around Israel.

·      *  Change the defense posture from deterrence to active defense.

 

To conclude I believe that this book should at least be a starting point for the coming investigation of Israel’s intelligence failures. The witnesses are in the book. Netanyahu and his cabinet will have a tough time in defending themselves from this indictment.

Change is Coming for CBS News and the Mainstream Media

 Today Paramount Skydance, the parent of CBS News, announced the acquisition of The Free Press (https://www.thefp.com ) for $150 million in cash and stock, a hefty price for a news organization that has 1.5 million subscribers, but only 175,000 pay. With the acquisition comes Bari Weiss, an outspoken journalist, with a large following. In four short years The Free Press has gathered a stable of writers that include Nellie Bowles* (Weiss' spouse), Jed Rubenfeld, Tyler Cowan, Niall Ferguson, Jonathan Haidt, Ayaan Hirsi Ali and Charles Lane, among others. 

Weiss will become CBS News' editor-in-chief and will directly report to Paramount CEO David Ellison. Weiss' strong positions against wokeness in the newsroom and her support for Israel will bring a breath of fresh air to stultifying  leftwing conformism of CBS. Her goal will be to broadcast news for the broad middle of the American public, namely the center-left and the center-right. "60 Minutes" and the evening news will soon look quite a bit different. 

If she succeeds it would help breakdown the algorithmic programming of social media that is designed to split the country apart in rage. It would also be a wake up call for NBC and CBS as well as the hoity toity New York Times from where Weiss was forced out by a woke ruled newsroom in 2020.

It is said that living well is the best revenge. With the takeover of The Free Press, founders Weiss, Nellie Bowles and sister Suzy Weiss are now quite rich. Dare I say it, Weiss is now richer than anyone in the New York Times newsroom. Needless to say, this will not go unnoticed.

As a paid subscriber to The Free Press, I can only wish Bari the best.

 *- Just to note I was banned from publishing book reviews on Amazon over Nellie Bowles' book. (See: https://shulmaven.blogspot.com/2024/06/my-amazon-review-of-nellie-bowles.html )

The Israel-Hamas War: Is Peace at Hand?

 On October 27, 1972, Henry Kissinger told the nation that “peace is at hand” in Vietnam. He was premature to say the least. We now have announcements from Israel, Hamas, and various Arab states that they are on board with President Trump’s 20-point plan to settle the Israel-Hamas War. Discussions will begin tomorrow in Egypt with Hamas already agreeing to release all of the hostages, both dead and alive, that they hold. A reason to be optimistic is that unlike in 1972 when the North Vietnamese Army was standing strong, Hamas is sitting on the brink of military defeat.

 

However, the hostage release is not the be all and end all to the conflict. The critical sticking points that remain is whether or not Hamas will disarm as required and that Hamas will have no role in the future governing body of Gaza. Both of those conditions Hamas has yet to agree to. Further complicating the situation is that Israel attempted to assassinate Khalil Al-Hayya, Hamas’ lead negotiator in Doha, an attack in which his son was killed.

 

My belief, or hope, is that these obstacles will be overcome. Why? Simply put, the correlation of forces is such that Hamas’ choice is to accept the terms or be “obliterated” using President Trump’s term. An early sign of progress will be the speed at which the Israeli hostages are being released. Of course, all of Israel will be looking at the physical condition of the alive hostages being released which will obviously affect Israel’s negotiating posture. Meantime, the ball is in Hamas’ court.

My Review of John Malone's "Born to be Wired: Lessons from a Lifetime...."

 Mogul

John Malone is a larger-than-life figure who played a leading role in bringing the cable industry into being. In telling his life story Malone gives us a history of the cable television industry from its humble beginnings to its peak in the late 20th century to its slow decline in the face of competition from streaming. He was also involved in a host of media deals starting in the 1980’s with CNN and right up to the potential of a Warner Brothers Discovery deal with Paramount Skydance.

The title of the book is derived from the Steppenwolf song “Born to be Wild.” We forget that CATV stands for Community Antenna Television. The industry began in the late 1960’s when a few hardy entrepreneurs began putting up towers in rural areas to capture the signals from over the air television. From the towers they strung wires to customers who previously were unable to watch television. Many of the founders actually strung the wires themselves. The industry exploded in the late 1970’s as satellites beamed down programming such as TBS and HBO to the cable operators. And in the 2000’s we witnessed  the full flowering high speed broadband connections into our homes.

Into this milieu stepped John Malone, a middle-class kid from Connecticut with a degree from Yale and a Ph.D. in operations research from Johns Hopkins. He started out at Bell Labs and in his 20’s he addressed the full AT&T board on how to improve its capital structure. After his suggestions were not adopted by the Bell-Heads, he transitioned to a consulting role and subsequently joined Jerold Electronics, a company that manufactures cable hardware.  After being passed over for the CEO job at Jerold’s parent company he struck a deal with Bob Magnes, who was building out his cable operation out of Denver. Malone became the CEO of Tele- Communications in 1973, and by 1996 it was the largest cable operator in country.

Although I was never a player in the industry, I was peripherally involved in the industry through a few small investments. In the 1970’s made seven times my money on Scientific Atlanta, a major supplier of cable boxes. Along the way I owned stock in Cox Communications and Malone’s Liberty Media, and I suffer for my sins by still owning shares in Comcast.

 

When I was working with Salomon Brothers in the 1990’s Bell Atlantic proposed taking over Tele-Communications. Salomon was representing Bell Atlantic in the deal. I remarked to Jack Grubman, Salomon’s star telecommunications analyst, that there is no way the cable cowboys in Denver would culturally mesh with the Bell Atlantic suits in Philadelphia. That deal did not happen, but when AT&T later bought Tele- Communications the cultural issues that I worried about came to the fore.

 

Malone presents portraits of such media moguls as Rupert Murdoch, Sumner Redstone, Ted Turner, Brian Roberts, Barry Diller, and David Zaslav. Afterall he was instrumental in the success of Turner’s CNN and funded Robert Johnson’s efforts to form BET (Black Entertainment Television) Though his Liberty Media, Malone  had control of Charter Communications, SiriusXM, Formula 1, Direct TV,  Home Shopping Network, The Discovery Channel, Match.com, international cable assets, and the Atlanta Braves. Although he has stepped back from active management, he remains a force to be reckoned with in the media world.

 

A good part of Malone’s success was due to his playing the tax code like a Stradivarius. Wherever he could he avoided the payment of taxes and the prime vehicle for that was to create letter stock in his affiliated companies. Although too complicated to go into here, letter stock enables the parent company to segregate the economics of a subsidiary to a new set of shareholders.

 

Not without good reason, Malone was vilified by the public and politicians as a monopolist who delivered poor service at high prices. Some of this was true because Tele-Communications under-invested in service and capital equipment, Hence the need to merge with a big Telco. As Malone recognizes the cable industry gold standard is Cox Communications (now Enterprises), which has the best customer service with the most advanced equipment. I was very unhappy when the company was taken private in 2004. Cox is now in the process of merging with Charter Communications to become the largest cable provider in the U.S.  

 

There is much more to Malone’s autobiography, and highly recommend this book for those interested understanding how our telecommunications cornucopia came into being.