The Panic of 1907: Lessons Learned from the Market's Perfect Storm | 
 enlarge | Authors: Robert F. Bruner, Sean D. Carr
Publisher: Wiley
Category: Book
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Avg. Customer Rating:  27 reviews
Sales Rank: 10889
Media: Hardcover
Number Of Items: 1
Pages: 272
Shipping Weight (lbs): 1
Dimensions (in): 9.1 x 6.1 x 1.2
ISBN: 047015263X
Dewey Decimal Number: 330.9730911
EAN: 9780470152638
ASIN: 047015263X
Publication Date: August 31, 2007
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Product Description
"Before reading The Panic of 1907, the year 1907 seemed like a long time ago and a different world. The authors, however, bring this story alive in a fast-moving book, and the reader sees how events of that time are very relevant for today's financial world. In spite of all of our advances, including a stronger monetary system and modern tools for managing risk, Bruner and Carr help us understand that we are not immune to a future crisis."
—Dwight B. Crane, Baker Foundation Professor, Harvard Business School "Bruner and Carr provide a thorough, masterly, and highly readable account of the 1907 crisis and its management by the great private banker J. P. Morgan. Congress heeded the lessons of 1907, launching the Federal Reserve System in 1913 to prevent banking panics and foster financial stability. We still have financial problems. But because of 1907 and Morgan, a century later we have a respected central bank as well as greater confidence in our money and our banks than our great-grandparents had in theirs."
—Richard Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets, and Professor of Economics, Stern School of Business, New York University "A fascinating portrayal of the events and personalities of the crisis and panic of 1907. Lessons learned and parallels to the present have great relevance. Crises and panics are as much a part of our future as our past."
—John Strangfeld, Vice Chairman, Prudential Financial "Who would have thought that a hundred years after the Panic of 1907 so much remained to be written about it? Bruner and Carr break significant new ground because they are willing to do the heavy lifting of combing through massive archival material to identify and weave together important facts. Their book will be of interest not only to banking theorists and financial historians, but also to business school and economics students, for its rare ability to teach so clearly why and how a panic unfolds."
—Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University, Graduate School of Business
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| Customer Reviews: Read 22 more reviews...
 The more things change, the more they remain the same September 5, 2008
Financial history is fascinating precisely because it documents simularities with the present, even while the products or organizational mechanisms of the time are different; this book is great for this moment of credit contraction and fear in the 21st century, a hundred years after the documented events.
Reading about JP Morgan (the person) meeting with the various bank and trust company heads, and bringing in Teddy Roosevelt as he felt relevant, reminded me both of the behind-doors funding conversations in 1998 that kept the Long Term Capital disaster from spreading (see When Genius Failed, by Roger Lowenstein), and made me think of Tim Geithner, head of the NY Fed, and Henry Paulson, Treasury Secretary, working with JP Morgan (the firm) in the spring of this year (2008) to contain the blow-up of Bear Stearns.
Timelines aren't always tight, and the historical material is a lot more limited that what Roger Lowenstein had to work with, but it is still a very compelling story and appropos comparison to the present. Interesting also is the international elements of gold movements to contain the unfolding crisis of credit/confidence.
 Great Background on the Industry Leaders of the Time! August 26, 2008
This book might as well have been named: "How J.P. Morgan saved the world from crisis." It was very well written and very interesting. I thought it was great that the author gave us a background on the major industry leaders at this time as they were more powerful than the U.S. Government (financially anyways). This time was a whole different time and I was immersed into the story throughout the book and wanted more at the end.
Panic of 1907: History and Lessons July 7, 2008
The Panic of 1907 begins with the roaring economy at the time---the boom that always comes before the bust. Then comes the initial shock---the San Francisco Earthquake---which shook not only the ground and brought down the buildings but put new strains on an already stretched capital market with new demands for money.
The overstretched capital market exposed a short selling stock scam in the shares of United Copper Co., an "on the curb" or what we would call a "pink sheet" stock today. This had been brought about by a failed effort by United Copper to corner the copper commodities market. More shares had been borrowed and sold than in fact existed. One by one the banks that had accepted the stock as collateral began to fail, both in New York and in the west. Then there was a lull in which they thought the worst was over. Then, a run on the Knickerbocker bank which caused it to slowly suffocate and the panic began to spread like a virus.
Because the United States National Bank rechartering had been vetoed long beforehand by Andrew Jackson, the U.S. had no central bank to manage the money supply. Thus, it fell to the bankers themselves to clear up the mess. J.P. Morgan became their leader and forged the deal that ended the crisis. He also needed President Theodore Roosevelt to agree to the deal. Roosevelt's recent speech about the "malefactors of wealth" was thought to have been aimed at Morgan and it had contributed to the further erosion of the stock market.
This Panic exposed the need to reestablish a central banking function in the United States to gain control of the credit market. This led to the creation of the Federal Reserve System.
Bruner and Carr recount this story in the first twenty chapters and then discuss their model for a panic and the lessons learned in the last chapter. Their discussion of Keynes, Friedman, Schumpeter, and Minsky is a good introductory explanation of the theories of the business cycle for a general audience.
I did notice one small error in the book. The author Sinclair Lewis is described as: "Muckraking writers such as Sinclair Lewis famously focused attention on unsanitary conditions in meatpacking." It was Upton Sinclair(1878-1968) who wrote the novel The Jungle(1906) about the meatpacking industry. A common mistake annoying to both men.
I think this is a useful book to read not only in the current situation but in the future. Business cycles will never disappear; they are part of our nature.
Learn from the past May 4, 2008
1 out of 1 found this review helpful
This book gave me huge insight into our nation's current situation as the names may have changed the general issues have not and maybe we can learn from that.
A nice lesson in economics May 2, 2008
4 out of 4 found this review helpful
This small book does a good job of explaining the Panic that led to the creation of the Federal Reserve Bank. In 1907, JP Morgan was powerful enough, and the world of finance was small enough, that one man could stem the tide. He was 70 years old and had had enough experience to know what to do. His reputation was such that others would take his advice. The story is well told and I was willing to give the authors one more star for their observation that John Maynard Keynes' 1936 recommendation for government counter-cyclical spending during recessions was quickly distorted by politicians to mean government spending in both boom and recession. That led to our present problems with deficits and discredited Keynes. That observation alone convinced me that these authors should be taken seriously. I recommend the story although, as others have pointed out, more information on the role of the gold standard would have been helpful. Morgan was a fascinating figure worth more attention as a cultural icon. It is appropriate that Caleb Carr includes him as a hero in his novels about the same era. A fine little book on economic history.
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