Ray,

I can not understand how all this short sale rule talk goes on and not one person who has actually traded a share of stocks gets there opinion out. All these economist and news casters talk like they even have a clue with how and why stocks move. The real problem with the removal of the up tick was that it went along with the removal of human beings. Super fast and thin markets are the reason why we are even having this talk. If we can slow these markets down even just a hair you will see a drastic reduction in over done over hyped moves. Can this view please be expressed. I know that I am not the only one with this opinion. Someone with some pull must feel the same way.

Thanks again,

Josh

by josh on April 8, 2009 11:48 AM

Great point Joshy, the SEC will have a time frame of couple months for public statements on their website. I plan on saying a few things myself but i will admit that it prob. make no diff what so ever to these people who never traded a hundred share lot in their lives. Say a prayer bro.

by tony dey on April 8, 2009 4:41 PM

Ray,

One of the myths surrounding the comparison of the '07 panic to today's, is that today's is so big and complicated that the "simple" way Morgan handled the '07 panic could not be done today.

On the contrary, the '07 panic was very complicated and was not just a simple matter of locking a few bankers in the room. Some historians such as Vincent Carosso (Steve Wheeler, Archivist for the NYSE, studied under Carosso) argued that the roots of the '07 panic dated back to '03 with the dissolution of the Northern Securities Company, then onto New York's Life Insurance Investigation starting in '05, the rising populist anti-Wall St. sentiment and attacks on big business in '06 and the Hepburn Act of '06.

Then in '07 F. Augustus Heinze's was involved in a scheme to corner United Copper which unwound leaving Otto C. Henize in a collapse which put enormous pressure on Mercantile Nat. Bank, leading to demise of the Knickerbocker Trust.

This was all followed by Morgan's intervention, the run on the trust Companies, the Assistance to the NYSE, the NY City Credit crisis and the Moore & Schley Rescue.

By the time Morgan was involved in these rescues he had two other generals in his camp. George Baker of the 1st Nat. Bank of NY and James Stillman of the Nat. City Bank. Morgan was assisted by Morgan partner Thomas Lamont who also worked along side of Ben Strong, secretary of Bankers Trust, Henry P. Davidson, founder of Bankers Trust and George Perkins of Morgan's firm.

These men were not unfamiliar with panics and reorganization. Morgan had been involved in the reorg. of "big steel" and the railroads in the 1890s and the early part of the 20th century. These were very complicated operations. He was all to familiar with the "1869 Gold Panic" and the Panic of 1873.

The big difference is that the rescue in '07 did not start during the early stages of the bear market, as was done in '08 with Bear and Countywide. In '06 and '07 failures occurred, the weak got shook-out and the markets cleared to the point where pricing could be accomplished.

Morgan and his group knew that had they started to early they would have polluted up the good banks with the mistakes of those who had done it wrong.

These instincts had theirs roots in Morgan's training by his father Junius and his father's partner, George Peabody back in England.

Regards,

Bart J. Ward

by Bart Ward on April 8, 2009 5:16 PM

nice story

by jerome on April 24, 2009 3:53 AM