The Wall Street Rebound : Show Little Fear on Security of Investments : Few Retirees See Repeat of 1930s
The market plunges. Fears of economic turmoil soar. Nettie Rosenblum has been there before.
After the crash of 1929, Rosenblum lost $2,000 when one of the banks where she kept her savings failed. This time around, Rosenblum’s money is locked in federally insured accounts; she swore off the stock market after losing a few thousand dollars some years ago.
Since then, “I never gambled and it was a good thing I didn’t,” said Rosenblum, who refused to tell her age except to say, “I’m a very old lady--they take me for 75 around here.
“They say that history repeats itself. Let’s hope it doesn’t,” she said. “I don’t think they’re going to let it happen like it did.”
Many senior citizens live on fixed incomes and would be particularly hurt by an economic downturn. Yet, even some of those who own stocks to supplement their pensions expressed little concern over the fate of their investments.
Rosenblum and other Southern California retirees interviewed Wednesday had some worries about the economy but few fears that the nation could fall into the type of wringing Depression they lived through in the 1930s.
“I remember it well,” said Fred Froelich, a retired aerospace executive. “The stock market crash--and it was that in 1929--has really no significant comparison to today because we don’t have, at least so far, any economic fallout.
“That was a time when you were lucky to have anything to eat,” the 78-year-old Huntington Beach resident said. “Today you have a lot of protective devices” including unemployment insurance, Social Security, Medicare and Medicaid.
At the retirement condominium building where Froelich lives, “everybody is going about their business,” he said. “I don’t see anybody walking around as if it were doomsday.”
Froelich considers himself lucky to have taken his money out of bonds early this year and put it into bank certificate of deposits, “and that’s where it’s going to stay.”
Dorothy Smith has her money in telephone stocks but is not too bothered by the market’s fall.
“The only thing I’m worried about is earthquakes,” Smith said. Besides, her stocks “haven’t gone down too far.”
But any long-term economic problems that would affect the health of those companies wouldn’t leave her unscathed: “I live on the dividends. Well, not live on them, but it helps me survive.”
Smith, a New York native, said she never thought she would see another stock market crash, “but I never thought I would live through an earthquake, either.”
One Santa Monica man, perusing a newspaper at the beachfront senior citizen recreation center, acknowledged that his blue chip stock portfolio lost at least $15,000 in value during the market’s wild ride.
But the 78-year-old, who accumulated much of his stock on tips from brokers gleaned while running a parking lot near the downtown Pacific Stock Exchange building, figures he spent only $10,000 to $15,000 to begin with, “so I don’t care.”
“I’ve owned most of these stocks about 20 years,” said the man, who wished to remain anonymous. “It will come back.”
Humphrey Nixon, an 80-year-old retired barber and one-time dance band leader, invests only in first trust deeds on real estate. But he is afraid the loss of wealth from Monday’s stock crash could be widespread.
“Even though I have no money in the stock market, it could hurt the people who are paying off on the trust deeds,” the Santa Barbara resident said. “It will filter down to the lowest of us.”
In October, 1929, Elizabeth Mullin was 23 years old and getting ready to marry when the market crashed. Her future husband, Richard Hill, “lost some money. It was rough.
“I remember a lot of people jumping out of windows,” said the 81-year-old widow, who worked for Warner Bros. in New York in 1929.
Hill does not own stock--”thank God for that”--but she does worry about the economic future “for my children and grandchildren. But there’s not much I can do about it, except say some prayers.”
To be sure, no one has predicted a replay of the 1930s on the economic front. Indeed, the economy is much stronger than it was in 1929.
Question Survival Skills
In the unlikely event of a restaging of the Great Depression, many of the retirees shake their heads and wonder if the younger generation would be up to the test.
“If you were able to survive the ‘30s, you came out a lot stronger for it,” Froelich said. “I don’t know if the younger generation has the backbone that we got through living those tough times.”
Said Rosenblum, “The children of today were born on the fat of the land and they don’t know the value of money. They were born with a silver spoon.
“These young people, it’s easy come, easy go,” she said. “They’re all looking to make a quick buck.
“I have an idea that it’s not going to be a bull market any more. It’s going to be a bear market for quite some time. That’s what I think.”
