EU Australia Online - News & information from the capital of Europe direct to Australian businesses

Down, Up …

  • January 23rd, 2008
  • Posted by 7thmin

euro-symbol-reduced9.jpgUpdate: Stock exchanges saw adjustments on Wednesday 23.1.08, prices in the United States, Australia and Asia beginning a recovery from the steep drops of the start of the week – encouraged by a quick interest rate cut in the United States. European markets held back.


The Wall Street stock exchange recovered in response to the Federal Reserve action on interest rates, climbing 2.4% (S&P index)on a day’s trading. Similar gains were registered on the Australian and Asian markets.

Falls continued in Europe, where central bankers indicated reticence to provide special credit relief.

On Wednesday (23.1.08) London’s FTSE was down 2.3%, Paris CAC 4.25%, DAX at Frankfurt 4.88%.


Thumbing through reports on such stock market falls produced some familiar stories, as with the New York crash of 1929; when fashion was against regulation of financial markets, volatile though they turned out to be.

Time magazine of the era reported (25.2.29) that in the lead-up, President Calvin Coolidge had “seen three great reductions in taxes”. He had also attacked public debt, (though, in a tendency contrary to certain successors had also appropriated an enormous $US325-million for Mississippi flood control).

Trouble arrived, anxieties took hold, at the opening of the stock exchange on Thursday 24.10.29 when a parcel of stock previously set at $US156 was traded at $US83.

People who’d been betting on stock market futures, and borrowing to invest, joined in the selling.

That continued despite assurances from government leaders that the underlying state of the economy, financial markets notwithstanding, was very strong.

“People had saved money and borrowed money on their borrowings to possess themselves of the little pieces of paper … Now they were trying to get rid of them even more frantically …”, Time observed on 4.11.29.

“Then at 1:30 pm, a popular broker and huntsman named Richard F. Whitney … made swiftly for Post No. 2 where the stock of U.S. Steel Corp. … is traded in. It was now at 190 … Broker Whitney made known that he offered $205 per share for 25 000 shares. Other buyers bought other pivotal stocks … [In 1938, Richard Whitney … went to prison for stealing from his clients] …

“But the now successful Bears made Monday, Oct. 28, a day of fresh disaster… Steel broke through 200, reeled down to 186. A.T.&T. fell 24 points; General Electric, 47 etc. …

“Tuesday brought a quota of cheerful utterances. President Hoover said that U.S. Industry was on a sound basis. But … 16 338 000 shares were dumped that day …”


Time Capsule 1929: A history of the year condensed from the pages of Time
; “The Coolidge Era, 25.2.29” (pp11-12), “Bankers versus Panic”, 4.11.29 (pp 215-6); 1967, Time Inc., NY.