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The Panic of 1907: Lessons Learned from the Market's Perfect Storm
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The Panic of 1907: Lessons Learned from the Market's Perfect Storm
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by Robert F. Bruner and Sean D. Carr
Sales Rank: 4968
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List Price: $29.95
$19.77
At Amazon
on 12-29-2007.
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Features
Hardcover: 272 pages
Publisher: Wiley August 31, 2007
Language: English
ISBN-10: 047015263X
ISBN-13: 978-0470152638
Product Dimensions:
9.1 x 5.9 x 1 inches
Shipping Weight: 13.6 ounces
From Publishers Weekly
Though business professors Bruner and Carr approach their subject, the spectacular financial crisis that gave America the FDIC and the Federal Reserve, with grave pedantry, they devote the majority of the book to the more colorful events and personalities of the crisis, which even academic prose cannot dull. The chronicle follows one speculator's attempt to corner the copper market, which leads to panic, the failure of banks and trusts and the impending bankruptcy of New York City. In the midst of chaos, one man was able to halt the domino effect with calm, character and capital: J. Pierpont Morgan. The Panic, the authors note, hit America at a moment eerily similar to our own: coming off 50 years of postwar economic expansion with a Republican "moralist" in the White House, an increasingly interventionist government, the formation of enormous new corporate conglomerates and a muckraking news media fueling resentment. Further, in a didactic final chapter, "Financial Crises as a Perfect Storm," the authors list the seven forces that, once converged, trigger alarm in investors, among them "buoyant growth," "inadequate safety buffers," "adverse leadership" and "undue fear, greed, and other aberrations"; that many (if not all) of these conditions are already met by today's market gives this authoritative history a relevance and vitality that should make business types sit up and take notice.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Product Review
"a great academic study, which was meant to be a warning. Instead, it reads like a description of what has just happened."--Financial Times
"A dull textbook it's not: Most chapters amount to six or seven pages of storytelling with cliffhangers… entertaining read"--Bloomberg News
"…the definitive guide to the stock market panic of ‘07"--The TImes
"an important read"--thestreet.com
"Bruner, dean of the University of Virginia's Darden School of Business, and Carr, director of the school's Batten Institute, tell the gripping tale of one of the worst financial panics in modern history, where greed and lack of liquidity (sound familiar, people?) dragged stocks down 37 percent."--U.S. News & World Report
"When The Business Press Maven first cast his eye for business journalism onto business books, it was with the ultimate hope of familiarizing investors with historical insight, which is more common in books than what is demonstrated in newsrooms and trading floors--where yesterday's news and trades qualify as fixtures from a bygone era . . . . That is why I am going to grant The Panic of 1907: Lessons Learned from the Market’s Perfect Storm, a resounding "Help" label from The Business Press Maven, putting it in the probable running for Top 10 Business Press Maven Books of 2007. In case you still don't get it, this is very high praise."—Marek Fuchs, The Business Press Maven, TheStreet.com
"This retelling of Morgan's bravura performance is a page-turning mix of high finance and high drama"--Barron's
Owner Reviews, Ratings, Comments and Criticism
Edwin Lefevre's anecdotal account of the cash crunch of October 1907 in his timelessly street smart REMINISCENCES OF A STOCK OPERATOR (1923) has always begged for further commentary. His colorful recollection of how J.P. Morgan "saved" the New York Stock Exchange - "A day I shall never forget, October 24, 1907" - is in this current history placed in the larger context of a more general U.S. monetary crisis. Contributing events included the sudden, unexpected demand for capital following the San Francisco earthquake (1906), a Bank of England decision to slow the flow of gold to the U.S., a recklessly leveraged stock scheme hatched on Wall Street, and the absence of a central banking authority. Plunging asset values, impaired loan collateral values, a general loss of confidence, bank runs, financial ruin, and personal tragedy were the consequences of a "panic" that gripped the markets in that year. Even as one private individual, J.P. Morgan, provided the leadership and liquidity to the banking system, the City of New York, and the New York Stock Exchange, the events of 1907 dramatically underscored the need for a central bank to watch over the monetary needs of the country. The U.S. Federal Reserve as a lender of last resort was created in 1913. The authors summarize the lessons of 1907 in a final chapter. I'm not sure that new ground is broken here, and the "perfect storm" cliche' is overdone these days, but it can be forgiven in this highly readable account. The point is that multiple contributing causes are in evidence in a financial crisis. Among those causes that stand out are an economy growing strongly where potential risks are marginalized (e.g. the recent mortgage meltdown), financial structures so interlinked or complex that no adequate overview can anticipate the impact of a failure (e.g. the size and opacity of the hedge fund industry), an exogenous shock (e.g. terrorist attacks of 2001), and a financial accident (e.g. a major bank or hedge fund collapse) that crystallizes the risks for the public. Market transparency, coordinated leadership, and adequate regulation are seen as critical elements in slowing the spread of contagion. The authors don't go out of their way to look for these contemporary parallels, but the links are unavoidable. The strength of this book is that it is a page-turning, 'great read' with the added benefit of providing some useful, cautionary measures to help spot the next financial crisis.
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The Panic of 1907: Lessons Learned from the Market's Perfect Storm
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