Day Trading & Forex Forum

mechtraderpro

For those who cannot remember that we have been here before. Just thought I would refresh everyone’s memory on some of the “older” boom and bust’s ...perhaps we should revive the old bailey tradition though !

The Panic of 1825

Britain was again rebuilding after conflict, this time the Napoleonic Wars. The economy went into overdrive and the liberalising of trade in Latin America created an export boom.
Speculation was so intense that some investors even began to throw money into schemes involving the imaginary South American Republic of Poyais. In tandem, Bank of England allowed easy finance for the boom.
By April the boom had become a bubble at bursting point. More than seventy banks collapsed and by Christmas, Bank of England intervention had failed to quell a now economy-wide panic.
Legend has it that the Bank of England was itself in danger of collapse until reversing its caution and acting as the 'lender of last resort', bankrolled by French gold.

1866 – Overend, Guerney & Co.

With roots deep in Quaker East Anglia, Overend, Guerney had survived the Panic of 1825 as the great discount bank of its time, second only to the Bank of England in its turnover, and had since become known as the 'bankers' bank'.
After the retirement of Samuel Guerney, though, a new breed of profit-hungry company directors expanded its core business into riskier investments such as shipyards, railways and other long-haul investments.
The bank took short-term loans to fund risky long-term schemes, incurring liabilities four times the size of its assets. It was a costly mistake. When several of its creditors collapsed, the bank's share price plummeted and, in desperate need, it was refused assistance by the Bank of England.
Overend suspended cash payments and panic spread across the country. The bank went into liquidation in June and its directors were tried at the Old Bailey for fraud. Other banks, now unable to find funding, also went under. With nearly 200 companies defaulting, the ensuing depression lasted several years.
The crisis led to Walter Bagehot's famous call for the Bank of England to act as the 'lender of last resort' – preventing economy-wide collapse by providing the last line of finance for troubled banks.

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IT IS JUST MY OPINION, IF YOU DON'T LIKE IT, I HAVE OTHERS "GROUCHO MARKS"

A BOX IS JUST A BOX UNTILL YOU LOOK OUTSIDE !

Rossini

Good post. The whole boom bust thing is coming in a more regular pattern- dont you think?

UKtradergirl

I hope so, i particularly enjoy the 'bust' part- for some reason i make more money when everything is going down instead of up.

Depth Trade

I wouldn't mind seeing a bust myself either.
I'm sick of all these young people demanding a 30k car and 300k home, everyone is so dellusional.
What a bunch of boring people, come of age and all they want to do is pretend there 60 years old and on the way out. Totally pathetic.

Tell you, when I make my first 100k I'm taking everything I own, piling it, covering it with fuel and burning it all.
Buy my self a horse and truck, buy some quality leather camping equipment and I'm going to go explore the world.

To hell with security, Adventure is where it's at.

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"The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government." (Thomas Jefferson)


OZ

N Rothschild

boom/bust is deliberately caused it doesn't just happen by chance

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"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Bullsh!t, Bearsh!t all smells the same to me!

mechtraderpro

Not quite the point I was trying to make really..! While some of us are making money (me included) We are now heading down !!!!..When we go down, there are genuine families out there that will be loosing all they have ..not through there own fault.but through the fault of greedy self consuming people who are willing to try to take everything for themselves without a thought, or indeed respect for there fellow human kind. Yes, you can say that some of the people have "borrowed" themselves into trouble, BUT, WHO USHERED THEM DOWN THE PATH !!!

__________________
IT IS JUST MY OPINION, IF YOU DON'T LIKE IT, I HAVE OTHERS "GROUCHO MARKS"

A BOX IS JUST A BOX UNTILL YOU LOOK OUTSIDE !

Jaydee

I'll add these from Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay (a cracking read, by the way):

The Mississippi Scheme (1719 - 1720)

The South-Sea Bubble (~1720)

Tulipomania - (1634/1635)


Just makes you realise that there will always be 'boom and bust' - they are opposite sides of the same coin.