Corporate & Securities Law

Zaring on the Panic of 1907

With an antitrust angle to boot:

The Panic of 1907, published last year by Robert Bruner and Sean Carr, is a good blow by blow account of the action stations nature of a financial crisis, in this case one that began with a freezing of the credit markets, blew up with an ill-timed effort to corner a commodities provider, and was famously resolved by private initiative.  Specifically, the initiative of J.P. Morgan, who browbeat fellow bankers into injecting liquidity into the teetering institutions (banks, broker-dealers, the City of New York) quickly, and often at usorious interest rates.  Fascinating stuff, not least because it shows how Morgan, the quintessential facilitator of monopolies, first thought of collusion as the solution to the crisis, which probably confirmed all of his suspicions about ruinous competition.  It’s a story of replacing market chaos with hierarchical and collaborative order, and I’d reference Weber if I didn’t think it would look a little too too.  But that’s not the only reasons to give it a look, of course, panic, crisis, today, etc.

Relatedly, here is the Global Competition Policy online magazine issue devoted to Antitrust in Times of Crisis, which includes this excellent historical perspective on antitrust enforcement during crises from Dan Crane.

Full post as published by Truth on the Market on February 03, 2009 (boomark / email).