The Panic of 1907

The Panic of 1907 takes a historical look at what is considered the third worst market crash in history and defines how it relates to the financial markets in 2007, exactly 100 years later. In a detailed and well-written narrative, authors Bruner and Carr take the reader through the story of the crash, beginning with the dramatic story of Charles T. Barney's death (Barney was the deposed president of the Knickerbocker Trust Company, one of the first financial institutions to collapse, who killed himself) and ending with the establishment of the Federal Reserve System (due to calls for government reform). The final chapter details lessons to be learned from the crash, including what the authors call a "potent formula for disaster"; information asymmetry; absence of slack; cognitive biases; overreaching; shock occurs; and, an inadequacy of response.