Friday, October 10, 2008

Market rebound

Good grief, the Dow's actually up as of this moment (8,726.61; +147.42 / +1.72% Oct 10 3:34pm ET). That seemed as unlikely this morning as, well, a McCain rebound. As for the Italian prime minister's suggestion that world markets be closed, I think that would be folly. That might work when you're preempting a selloff, as at the outset of World War I, but not when you're already well into one. Here's how J.P. Morgan regarded such an idea in the 1907 Panic:

Then, on October 24, J.P. rescued the stock market. That day, the president of the New York Stock Exchange, the intriguingly named Ransom H. Thomas, rushed over to Morgan’s Wall Street office to tell him that some 50 brokerage firms were about to collapse, unless massive rescue funds could somehow be provided. Thomas began talking about shutting the Exchange.

Morgan asked Thomas what time the Exchange normally closed — a datum the financier did not know even though he worked just yards away. (“Stock trading was vulgar,” explains historian Ron Chernow in his book The House of Morgan .) Informed that would be 3 p.m., J.P. wagged a finger at Thomas and commanded, “It must not close one minute before that hour today.”

No comments: