The parallels with today are uncanny. Certain characteristics of that panic are with us today: excessive leverage (aka gearing), contagion from one company or industry to others, negative feedback loops (then called vicious cycles), a panic atmosphere, an attempt to get liquid by all parties, and a solution (or today’s attempted solution) by a strong party–today the Fed, in 1907, J. P. Morgan, who browbeat fellow bankers to collectively come to the rescue.
Hmmm, since the Fed is not yet successful in bringing stability, the jury is still out as to whether or not the J. P. Morgan approach will prove to be more successful.
