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| The Panic of 1907: Lessons Learned from the Market's Perfect Storm | 
 enlarge | Authors: Robert F. Bruner, Sean D. Carr
Publisher: Wiley
Category: Book
List Price: $29.95
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Avg. Customer Rating:  31 reviews
Sales Rank: 1980
Media: Hardcover
Number Of Items: 1
Pages: 272
Shipping Weight (lbs): 0.9
Dimensions (in): 9.1 x 6 x 1
ISBN: 047015263X
Dewey Decimal Number: 330.9730911
EAN: 9780470152638
ASIN: 047015263X
Publication Date: August 31, 2007
Availability: Usually ships in 1-2 business days
Condition: Brand new hard cover with dust jacket just arrived from publisher - ships with tracking #
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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 26 more reviews...
 J. Pierpont Morgan Saves the World September 6, 2007
49 out of 57 found this review helpful
This is a very short book about a fairly complex event. While it is accessable to the general reader, the book comes alive only when describing the recovery efforts of a group of private financiers led by J. Pierpont Morgan. More focus is needed to show how the problem developed and to help explain the dynamics of investor panic contagion. Further, government officials are given short shrift as either creators of the problem (President Roosevelt) or as Morgan's lackeys (Secretary of the Treasury Cortelyou).
The authors portray Morgan as a giant among dwarves. He almost singlehandedly ends the panic with visionary, unselfish, decisive and commanding presence. In regard to the latter attribute, Morgan is shown summoning the United States Treasury Secretary to New York, warning short sellers that they will be "properly attended to" after the crisis and ordering bank presidents to work. At one point, Morgan is almost godlike as he decides which savings institutions will be supported and which will be allowed to die.
Thus, The Panic of 1907 becomes the story of J. Pierpont Morgan vs. panic and greed. Government is given little credit for helping solve the crisis (except when the president agrees to interrupt his breakfast to promise he won't interfere with Morgan's plans). As an example of "adverse leadership," Theodore Roosevelt is listed as a primary cause of problems due to "rising regulation of an activist President."
While it may seem like a small error, the authors mistakingly credit novelist Sinclair Lewis with reporting about the meatpacking business rather than Upton Sinclair. This carelessness causes me some concern about other details presented in this work.
The reader knows more about the events of 1907 when he finishes the book but I am not sure that knowledge is balanced. Further, I did not find the lessons for today very applicable or compelling. I think the book would have benefitted from a bit more discussion about causes, effects and implications for the present. I would also be interested in a more nuanced analysis of the motives of Morgan and the other financiers who acted to help turn the corner on the panic but who must bear some responsibility for the state of finances prior to the crisis.
 An Insightful Look at a Financial Perfect Storm November 27, 2007
35 out of 41 found this review helpful
Shortly before 10:00 on the morning of November 14, 2007 Charles T. Barney walked into his second-story Park Avenue, took the pistol containing three bullets kept there for protection and fired one bullet into his head.
Up to that moment, he was a man of the Gilded Age. The son of a prosperous Cleveland merchant, he married into the Whitney family, was a director of 33 companies and had served as the top officer of the Knickerbocker Trust Company up until a few short weeks prior.
He had been asked to resign. The reason: early the previous month, he, along with several other New York City trust companies had funded an attempt to corner the market in the stock of a copper mining company. The attempt had failed. As word of his involvement spread, his investors and depositors panicked and started a run on his bank that would eventually lead to its closing.
The country had lost confidence in its financial system. It would take leadership, largely from one man, J. P. Morgan, to restore it.
Robert F. Bruner and Sean D. Carr take the reader day-to-day through this crisis. Beginning with the famed San Francisco earthquake and culminating with Barney's suicide, they draw seven lessons that are, perhaps more instructive today, than they would have been in 1907. They are:
1.Complexity makes it difficult to know what is happening and establish linkages that enable the crisis to spread.
2.Economic expansion creates rising demands for capital and liquidity. The mistakes that accompany those rising demands must eventually be corrected.
3.In the late stages of an economic expansion borrowers and creditors overreach in their application of debt. This lowers the financial system's safety margin.
4.Prominent public and private figures provided adverse leadership. Their policies raise uncertainty, lower confidence and elevate risk.
5.Random events shake the economy and financial system.
6.Greed becomes fear.
7.Well-intended responses prove inadequate to the crisis' challenge.
This book drips with insight. Well-written, easy-to-read, it should be read by banker, traders and students of business and economics. It is a rare dissection of how and why a panic unfolds.
Detailed and Nicely Paced - 'Reads' Like and A&E Documentary October 1, 2007
20 out of 21 found this review helpful
Edwin Lefevre's anecdotal account of the cash crunch of October 1907 in his timelessly street smart REMINISCENCES OF A STOCK OPERATOR (1923) has always begged for further commentary. His colorful recollection of how J.P. Morgan "saved" the New York Stock Exchange - "A day I shall never forget, October 24, 1907" - is in this current history placed in the larger context of a more general U.S. monetary crisis. Contributing events included the sudden, unexpected demand for capital following the San Francisco earthquake (1906), a Bank of England decision to slow the flow of gold to the U.S., a recklessly leveraged stock scheme hatched on Wall Street, and the absence of a central banking authority. Plunging asset values, impaired loan collateral values, a general loss of confidence, bank runs, financial ruin, and personal tragedy were the consequences of a "panic" that gripped the markets in that year. Even as one private individual, J.P. Morgan, provided the leadership and liquidity to the banking system, the City of New York, and the New York Stock Exchange, the events of 1907 dramatically underscored the need for a central bank to watch over the monetary needs of the country. The U.S. Federal Reserve as a lender of last resort was created in 1913.
The authors summarize the lessons of 1907 in a final chapter. I'm not sure that new ground is broken here, and the "perfect storm" cliche' is overdone these days, but it can be forgiven in this highly readable account. The point is that multiple contributing causes are in evidence in a financial crisis. Among those causes that stand out are an economy growing strongly where potential risks are marginalized (e.g. the recent mortgage meltdown), financial structures so interlinked or complex that no adequate overview can anticipate the impact of a failure (e.g. the size and opacity of the hedge fund industry), an exogenous shock (e.g. terrorist attacks of 2001), and a financial accident (e.g. a major bank or hedge fund collapse) that crystallizes the risks for the public. Market transparency, coordinated leadership, and adequate regulation are seen as critical elements in slowing the spread of contagion.
The authors don't go out of their way to look for these contemporary parallels, but the links are unavoidable. The strength of this book is that it is a page-turning, 'great read' with the added benefit of providing some useful, cautionary measures to help spot the next financial crisis.
a must read for anyone interested in American finance September 5, 2007
18 out of 19 found this review helpful
Bruner's book is a must read for anyone interested in the history of American finance, or in the intricacies & complexities of financial crises in the US & elsewhere. The 1907 Panic was at once a watershed event in US finance, since it was the immediate stimulus for the creation of our first real central bank, the Federal Reserve. But it also was (and is) typical of financial crises generally. Those of the 19th century that immediately preceded it (that is, in the post-Civil War "Gilded Age"), and those of our own time (that is, Enron, Long-Term Capital Management, Continental Illinois, etc.). Bruner has done an fine job digging up the details of what actually happened in the October/November 1907 crisis, the personalities & institutions, and in showing how these events overlaid on an already unstable economic situation that were lowering public confidence. The book is very well written, if not novel-like, certainly approaching the form. I read nearly all of it in one sitting.
 Morgan did deserve the credit September 12, 2007
15 out of 19 found this review helpful
I agree with the previous review on the poor editing of this book. Indeed the kinds of mistakes made are uncalled for. But the previous reviewer need not question the role that Morgan played in the rescue nor the government's weak involvement. One of the surest ways to determine the accuracy of events of long ago is to research what was the generally held opinion at the time of the events. Without exception all parties ( the bankers, Roosevelt, financial journalists, etc) credited Morgan with the victory. Even the normally hostile press and public recognized this. Their good tidings did not last long of course because they knew that Morgan would not live forever. What would they do after he died? Hence the adoption of fellow banker Paul Warburg's recommendations for a Federal Reserve system.
As to the governments lack of involvement. Well, that's logical given that there was no structure in place for the government to work through. It was a 'Wall Street problem'.
For a much better history and analysis of these events read Ron Chernow's 'The House of Morgan', Jean Strouse's 'Morgan', and Carosso's 'The Morgans'. And if you can find a copy, Herbert Satterlee's 'J Pierpont Morgan'. ThESE are the books on the subject.
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