Tuesday, October 23, 2007

100 Years After

Photo Sharing and Video Hosting at Photobucket
Photo of J P Morgan courtesy of the BBC

BBC: Almost exactly 100 years ago at 4.45 in the morning of a November day on the corner of Madison and 35th Street in New York a group of some 50 or so exhausted men stumbled out into the street.

Some had not slept for days.

Behind them, on the other side of the monumental brass doors that closed behind them, they left a piece of paper which pledged them collectively to a loan of some $25m - about $10bn (£5bn) in today's money.

Beside it stood a large gentleman with a walrus moustache, who had forced them into the deal which ended a two-week financial panic that had come close to destroying New York's financial system. That man was J Pierpont Morgan.

From 1903 to 1906 the global economy had boomed and the Dow Jones had doubled.

But the global supply of gold to which all hard currency was pegged had not kept pace, and hard cash was increasingly scarce.

A hundred years later our credit squeeze had its genesis in the infamous sub-prime mortgage market of the US. 100 years after the 1907 credit crunch (more) By Jamie Robertson

Financial crises: Lessons from history By Steve Schifferes

Mark Alexander