Archive for December 20, 2012

Financial Panics

“On Monday, 21 October, as the President headed home with deliberate slowness, to avoid even sharper panic, rumors circulated that the Knickerbocker (Trust) had only ten million dollars left in cash. With sixty million loaned out, the trust might be unable to issue good checks past midday Tuesday…” (from Theodore Rex by Edmund Morris, p 498). Think you are reading about President Bush and the Panic of 2008. Think again. This is a description of the Panic of 1907 and the President referred to was Teddy Roosevelt. the Panic was eerily reminiscent of 2008. The Panic was averted by an infusion of cash by the government and by J. P. Morgan similar to President Obama’s bailout!