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Worst investing disasters of all time - Company comebacks: Apple, Exxon, IBM - MSN Money
By Anthony Mirhaydari
1792: The first Wall Street bailout
America's first stock market bubble came just two years into George Washington's first term as president. The genesis can be traced to Treasury Secretary Alexander Hamilton's financial programs, including the creation of the Bank of the United States, which boosted U.S. securities.
Hamilton contributed to the rise by repurchasing government bonds -- not unlike what the Federal Reserve is currently doing.
Speculator William Duer formed the "Six Per Cent Club" to corner the stock of the Bank of New York and the Bank of the United States. The combine found initial success, with stock prices toward the end of 1791 rising rapidly in New York, Philadelphia and Boston. Small investors were pulled into the fray.
The New York Journal wrote: "The cry is -- what can be the reason for this strange and astonishing rise of the American stocks! O that I had but cash -- how soon would I have a finger in this pie!"
It wouldn't last. Duer overextended himself and was forced to liquidate shares in March of 1792. Whispers of his failure spread up and down Wall Street, resulting in a wave of panic selling. Hamilton intervened.
It was America's first Wall Street bailout.
And here we are, REPEATING the FAILURES of the past.
But it will work this time. Right?
1929: The Great Crash
No discussion on the worst episodes on Wall Street is complete without a look at the 1929 stock market crash that led to the Great Depression. Too typically, the run-up was fueled by intense speculation, easy money and overconfidence. American stocks nearly quadrupled between 1921 and 1929.
The creation of the Federal Reserve led many to believe that the economy was done with booms and busts. The president of the NYSE announced that "we are apparently finished and done with economic cycles as we have known them." Voices of caution were ignored. Sound familiar?
The beginning of the end came on Aug. 8, 1929, when the Fed increased its lending rate from 5% to 6%. This relatively minor act set off a chain reaction of tighter credit, forced selling and panic that culminated in the "Black Thursday" and "Black Tuesday" declines of Oct. 24 and Oct. 29, 1929. At their nadir in 1932, stock prices had fallen more than 80% from their pre-crash peak.
By Anthony Mirhaydari
1792: The first Wall Street bailout
America's first stock market bubble came just two years into George Washington's first term as president. The genesis can be traced to Treasury Secretary Alexander Hamilton's financial programs, including the creation of the Bank of the United States, which boosted U.S. securities.
Hamilton contributed to the rise by repurchasing government bonds -- not unlike what the Federal Reserve is currently doing.
Speculator William Duer formed the "Six Per Cent Club" to corner the stock of the Bank of New York and the Bank of the United States. The combine found initial success, with stock prices toward the end of 1791 rising rapidly in New York, Philadelphia and Boston. Small investors were pulled into the fray.
The New York Journal wrote: "The cry is -- what can be the reason for this strange and astonishing rise of the American stocks! O that I had but cash -- how soon would I have a finger in this pie!"
It wouldn't last. Duer overextended himself and was forced to liquidate shares in March of 1792. Whispers of his failure spread up and down Wall Street, resulting in a wave of panic selling. Hamilton intervened.
It was America's first Wall Street bailout.
And here we are, REPEATING the FAILURES of the past.
But it will work this time. Right?
1929: The Great Crash
No discussion on the worst episodes on Wall Street is complete without a look at the 1929 stock market crash that led to the Great Depression. Too typically, the run-up was fueled by intense speculation, easy money and overconfidence. American stocks nearly quadrupled between 1921 and 1929.
The creation of the Federal Reserve led many to believe that the economy was done with booms and busts. The president of the NYSE announced that "we are apparently finished and done with economic cycles as we have known them." Voices of caution were ignored. Sound familiar?
The beginning of the end came on Aug. 8, 1929, when the Fed increased its lending rate from 5% to 6%. This relatively minor act set off a chain reaction of tighter credit, forced selling and panic that culminated in the "Black Thursday" and "Black Tuesday" declines of Oct. 24 and Oct. 29, 1929. At their nadir in 1932, stock prices had fallen more than 80% from their pre-crash peak.
