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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: If only I'd held who wrote (97357)	4/16/2000 3:08:00 PM
From: Smart_Money	Respond to of 108040

Little history for you guys. very interesting, from Mike. In 1900 the most powerful man in the world was J.P. Morgan. He was the baron of Wall Street and became the most powerful international banker in the world during World War I. He worked mostly behind the scenes, never out in the open. One of his main advisors, was a Colonel House, who also happened to be the main advisor to President Woodrow Wilson. House had his hands in the creation of the Federal Reserve Board and the World War I peace treaty. When the stock market collapsed in 1907 it was a freefall. The selling didn't stop until J.P. Morgan stepped up and personally pumped so much money into the market that he was able to stabilize it. After seeing what he was doing other Wall Street firms joined in the buying and supported the market. In 1929 stock market crash the public got massacred. It was hard to find an uptick. It was called Black Thursday John F. Kennedy's father was short and made a fortune. So was Jesse Livermore. The Bank of Morgan was already cashed out and was sitting on the sidelines. Thomas Lamont, who took over the operations of the bank after J.P. Morgan died, called up a committee of men, made up of the heads of the nations largest banks, and held a meeting. They left the meeting a few hours later and walked on to the New York stock exchange floor. Lamont walked up to the booth for U.S. Steel and bid 205 for twenty thousand shares. $410,000 worth of stock. The other men went to other booths and did the same. They spent a total of around $125 million dollars. No small sum in 1929. Traders on the floor took notice and began buying. The market rallied into the afternoon and for several days. But it wasn't enough. The next Tuesday the market completely collapsed. In two days it fell another 25%. The reputation of the Morgan Bank and Wall Street was destroyed. Once elected, the new President, Franklin Roosevelt took steps - through the use of regulation - to limit the power of the Bank of Morgan and reverse the policies they - and other large banks -encouraged and the Federal Reserve carried out in the 1920s which helped to lead to the crash and depression. Chiefly being adherence to the gold standard and higher interest rates while the country was in a recession and the European economies were in a depression caused by World War I and war debts owed to the Morgan Bank and other international banks. It was the end of a dynasty. As Roosevelt said in his inaugural, he was going to "throw the moneylenders out of the temple." Now someone will talk about throwing theoracle out - Greenspan - if this current mess doesn't stabilize. lessons to be learned from this: This market downturn will most likely end when you see large institutional firms begin to buy stock. Buying by individual investors will not stop this crash. Historically this is how crashes end. In fact there was talk by a few floor traders on the NYSE that they were just sitting on the sidelines and waiting for a "white knight" to come in on CNBC Friday. That's what they were talking about. You'll know it will happen when you see large buy blocks go by in stocks and someone on CNBC will say that "buy programs" are being executed. I expect that the open Monday will be rough.