The Washington times., 1930-10-22
Bursting Bubbles

Bursting Bubbles
The character Of the selling
since the present reaction started
Q month ago raises the strong
belief that some Of our big for
tunes built up by pyramiding on
bull market initiation are going
to end UP severely deflated If
not wiped out entirely. This in
wolves some Of the investment
trusts also, for they were the final
gesture Of the late lamented new
era"
The individuals behind them
are naturally in the same situa-
ton. Much of the bull market
wealth was represented in issues
Of series Of securities on rela-
lively thin equities. In not q
few cases stocks and bonds were
hooked" for other issues, so that
Q decline in one seriously I'M
paired the others.
With this as a background, the
cause Of much of the liquidation
becomes clearer. And even though
banks are known to be helping
those sorely pressed where funda-
mental situations are involved,
there is good reason to believe
that certain houses are still to
be put in order.
Yet there are encouraging
signs. Residential building is
perking up. And the textile in
dustry, o good index to general
business. is beginning to see some
daylight after many long, lean
days. Sales of finished cotton
goods in September were $50
per cent over production, am
told. Curtailment, Of course, is
the reason for this, but the up
turn is encouraging. indicating
more jobs in at least one indus
try before long. Now, If Presi-
dent Hoover's Unemployment
Commission can accomplish some
thing, it will go q long way to
setting the prosperity ball rolling
again.
In the "Gravy"
The leading bank stocks to me
offer better speculative oppor-
tunities than even the seasoned
big board leaders. It is obvious
that the banks have been lending
Q helping hand right and left
throughout all the stock market
debacle Of the past year, and
especially Of late, and the con-
Sideration was probably very
handsome.
Commercial borrowing is of
course way down, affecting earn
ingS considerably, but income from
from other sources will undoubt-
edly make up for this with a good
deal to spare. The banks also
are the first to know when a turn
is coming and the first to get into
stocks at the bottom, which also
iss profitable. Shrewd investors
realize this andsI heard today Of
q buying order for one of the
leading bank stocks ''big enough
to knock your eyes out" My IA
vorites are Chase and City, but I
wouldn't hurry about buying them
for bank stocks follow the big
board.
More is heard Of support buy
ing in some Of the market lead
ers. I hear that an order for big
blocks Of Case was put in when
1t broke 40, the bids starting at
118 and scaling down to 100.
Can also will meet big scale
buying from 11O down to 100, /
am told. And some corporations,
] understand, are seriously con-
sidering buying their own stocks.
The Rubbers
Goodyear broke to a new low
coincident with a news service
survey indicating fiercer competi-
tion in the trade for 1881. The
rubber companies have been hav-
ing O hard time, what with re-
duced automobile output, lower
replacement demand and the
steep decline in crude rubber,
raising inventory problems and
losses. Yet the tire manufac-
turers. viii come into their own
when general business is right,
and Goodyear should have a
bonanza year then as the leader
in the industry. The S. dividend
Is apparently doomed and the
stock looks lower. However, I
wouldn't hesitate to buy Good
year around 80 as an excep-
ticnal long term speculation.
Interests close to International
Cement point out the stability Of
the company'S earnings despite
the depression. The company is