We Study Billionaires - The Investor’s Podcast Network Classic 05: A History of 5 Stock Market Crashes w/ Scott Nations
Feb 1, 2022
Scott Nations, author of "A History of the United States in Five Crashes," dives deep into the significant stock market crashes from 1907 to 2010. He highlights how today's FED policies echo those leading to the 1929 crash. Nations illustrates the 1987 decline of 22.6% in just one day and critiques the 2008 financial incentives that led to a massive market failure. He warns that future crashes may resemble the rapid 2010 flash crash rather than past events, emphasizing the unpredictable nature of market dynamics.
AI Snips
Chapters
Books
Transcript
Episode notes
J.P. Morgan's Intervention
- During the 1907 crash, J.P. Morgan saved the stock market by raising $25 million in 15 minutes.
- He pledged his own money and convinced other bankers to contribute, preventing the NYSE's early closure.
Creation of the Federal Reserve
- The Panic of 1907 highlighted the need for a central banking system in the US.
- This led to the creation of the Federal Reserve in 1913 to manage financial crises.
1929 Crash Factors
- Euphoria and new technologies fueled the stock market boom in the late 1920s.
- The Federal Reserve's low interest rates, intended to help England, contributed to the bubble.
