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History of the United States in 5 Crashes: Meltdowns That Defined a Nation


DooDiligence
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Interesting that he doesn't mention the tech crash in 2000.

 

 

"The Panic of 1907: When the Knickerbocker Trust Company failed, after a brazen attempt to manipulate the stock market led to a disastrous run on the banks, the Dow lost nearly half its value in weeks. Only billionaire J. P. Morgan was able to save the stock market.

 

Black Tuesday (1929): As the newly created Federal Reserve System repeatedly adjusted interest rates in all the wrong ways, investment trusts, the darlings of that decade, became the catalyst that caused the bubble to burst, and the Dow fell dramatically, leading swiftly to the Great Depression.

 

Black Monday (1987): When “portfolio insurance,” a new tool meant to protect investments, instead led to increased losses, and corporate raiders drove stock prices above their real values, the Dow dropped an astonishing 22.6 percent in one day.

 

The Great Recession (2008): As homeowners began defaulting on mortgages, investment portfolios that contained them collapsed, bringing the nation’s largest banks, much of the economy, and the stock market down with them.

 

The Flash Crash (2010): When one investment manager, using a runaway computer algorithm that was dangerously unstable and poorly understood, reacted to the economic turmoil in Greece, the stock market took an unprecedentedly sudden plunge, with the Dow shedding 998.5 points (roughly a trillion dollars in valuation) in just minutes."

 

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Interesting that he doesn't mention the tech crash in 2000.

 

 

"The Panic of 1907: When the Knickerbocker Trust Company failed, after a brazen attempt to manipulate the stock market led to a disastrous run on the banks, the Dow lost nearly half its value in weeks. Only billionaire J. P. Morgan was able to save the stock market.

 

Black Tuesday (1929): As the newly created Federal Reserve System repeatedly adjusted interest rates in all the wrong ways, investment trusts, the darlings of that decade, became the catalyst that caused the bubble to burst, and the Dow fell dramatically, leading swiftly to the Great Depression.

 

Black Monday (1987): When “portfolio insurance,” a new tool meant to protect investments, instead led to increased losses, and corporate raiders drove stock prices above their real values, the Dow dropped an astonishing 22.6 percent in one day.

 

The Great Recession (2008): As homeowners began defaulting on mortgages, investment portfolios that contained them collapsed, bringing the nation’s largest banks, much of the economy, and the stock market down with them.

 

The Flash Crash (2010): When one investment manager, using a runaway computer algorithm that was dangerously unstable and poorly understood, reacted to the economic turmoil in Greece, the stock market took an unprecedentedly sudden plunge, with the Dow shedding 998.5 points (roughly a trillion dollars in valuation) in just minutes."

 

I missed that.

 

Does seem like it should be included.

 

I'll pass, got a pile of stuff to read anyway.

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Thanks might buy this. Like others, I have some catching up to do. Sometimes it's hard to capture history with a book. Hindsight can make it look all too sequential ("there was a crazy run of internet stocks with no revenue and then BOOM") when in actually there was irrational exuberance about a technology that did in fact lead to basically everything people predicted.

 

One thing I've found enlightening from Ray Dalio's book is how much they studied history. His quote is something along the lines of "everything is a modern version of something that happened in the past".

 

 

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  • 4 weeks later...
Guest Cameron

was an okay book, nothing too in depth, I wouldn't recommend it if you already have a basic idea of the crashes mentioned since thats basically what it is. I like that he has a list of suggested reading list if you want something more. I'd recommend Morgan by Jean Strouse.

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Just finished this book. It's an interesting read and fairly high level on each of the 5 crashes. I think main take away is that we have seen many instances of human psychology, financial instruments, and leverage often combine in some form to produce panic, fear, and selling.

 

I think it would be more interesting/beneficial to explore specific crashes and recessions in further depth.

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  • 4 months later...

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