Duncan on Equity Culture; Markets Open on Inauguration Day; MatchPoint Revving Up; Capitalism and Trust

By: Ray Pellecchia: File Under: MatchPoint, NYSE

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NYSE CEO Duncan Niederauer on our equity culture as well as hedge funds, leverage, regulation, NYX and more
(Nightly Business Report, video or transcript)

Markets Open on Inauguration Day (WSJ.com)
A spokesman for the Big Board, a unit of NYSE Euronext, said of the Jan. 20 inauguration: "That will be an important and historic day for America as well as for the rest of the world, and the best way for us to mark the occasion as a global financial marketplace is to be open for business."

NYSE MatchPoint Revs Up Today (Client Notice, Backgrounder Slides, Exchanges post)

Capitalism and Trust (Robert Bruner) -- Excellent read, including J.P. Morgan's famous exchange with a Congressman, in part:
UNTERMYER: Is not commercial credit based primarily upon money or property?
MORGAN: No, sir: the first thing is character.
UNTERMYER: Before money or property?
MORGAN: Before money or anything else. Money cannot buy it.

Is Financial History Bunk? (Paul Kedrosky's Infectious Greed)
The Value of Financial History (David Merkel)
What do you think: valuable, bunk, or somewhere in between?

In Today in NYSE History (NYX.com), a reminder of the Great Depression (no shortage of such reminders these days!):
07 Jan. 1933 -- The Exchange was closed for the funeral of Calvin Coolidge.

Comments

Ray,

As you the know the famous exchange between Untermyer and Morgan occurred during the famed Pugo hearings of late 1912. The exchange quoted above was applauded by spectators, businessmen and investors across the country. Henry Seligman was quoted that stock prices jumped up to 10 points on testimony given by Morgan. In Ron Chernow's book the House of Morgan he states, "early merchant bankers used character and class as crude forms of credit screening; ever since the Medicis and Fuggers.... Pierpont's [Morgan] statement was neither as cynical as critics thought nor as noble as friends imagined. It was a workable business strategy."

On a side note, the hearings were a result of the '07 crash. A few talking heads have said over the past few months that this decline we are in should be handled the same way that it was in '07. That is, "just flood the system with liquidity as they did back then and all will be right."

A bad read on history! There was no Fed at the time (The Fed went into operation 1914), Morgan was banker of last resort. Liquidity was not provided until many financial institutions went down, the Knickerbocker Trust being one of the biggest. Morgan waited and picked his time and point. That point was the imminent failure of the Trust Company of America. That is where he began the rescue. Nearly one year after the stock market topped and we were well into the marketplace shaking out the weak and those who had over-speculated during the boom. The markets then cleared quickly and the next bull run followed shortly.

Regards,

Bart Ward

by Bart Ward on January 8, 2009 4:26 PM

Bart -- You give me too much credit; I knew just a fraction of that. Great stuff! Thanks for taking the time and sharing it. It offers some great context and perspective on what we're going through today.

by Ray Pellecchia on January 8, 2009 4:45 PM

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Duncan on Equity Culture; Markets Open on Inauguration Day; MatchPoint Revving Up; Capitalism and Trust

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