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Quote of the Day
“At length our paper bubble has burst, the failure of Duer in New York soon brought on others, and these still more, like nine pins knocking one another down, till at that place the bankruptcy is become general, every man concerned in paper being broke, and most of the tradesmen and farmers, who have been laying by money, having been tempted by speculators to lend it to them at 3 to 6 percent a month, have lost the whole.”
-President Thomas Jefferson on the Panic of 1792, which reached its peak on this day in 1792 and result in a former U.S. Treasury Secretary being thrown in debtors prison. Jefferson would go on to estimate the losses due to the panic would be equal to what might have occurred if the city [New York City] was leveled.
March 23rd – This Day in Stock Market History
March 23rd, 1792 – William Duer, the first assistant Secretary to the U.S. Treasury is thrown in debtors prison, where he would spend the rest of his life. Duer was ruined by the Panic of 1792, in which played a prominent role in speculating on bank scripts (like warrants or option). News of Duer’s failure spread fear around the city, forcing many to prove their solvency. In a 2 week period stock prices would decline 25%. 25 banks would fail the next day alone.
Source: Panic on Wall Street: A History of America’s Financial Disasters
March 23rd, 2009 -The Dow Jones Industrial Average rises 6.84%, or nearly 500 points, after the Obama administration unveils its plan to set up a $1 trillion fund for banks to offload bad assets, such as subprime mortgages.
Then Treasury Secretary Tim Geithner explained the plan, and reminds us how bad the market was then to CNN:
March 23rd, 2012 – BATS exchange has a failed IPO. Shares of the exchange operator were priced at $16 per share, opened around $15.25. The immediate 75 cent drop led to some very large sell orders. By 11am shares were being quoted at $0.04 per share!
The company halted trading, and pulled its IPO.
BATS would not IPO until April 15th, 2016. It has since been acquired by CBOE Holdings.
Best March 23rd in Dow Jones Industrial Average History
2009 – Up 6.84%, 497.48 points.
Worst March 23rd in Dow Jones Industrial Average History
1938 – Down 2.33%, 2.73 points.
Read of the Day
BATS was one of several exchanges operating in the United States. Another new comer in the field is IEX, which aims to “slow down” trading to prevent high frequency traders from taking advantage of order flows. You can read a little bit about how the exchange works and operates in a blog post here: https://medium.com/boxes-and-lines/2016-in-review-americas-newest-stock-exchange-4f4b1171159e
Or learn a whole lot in Micheal Lewis’ Book, Flash Boys: A Wall Street Revolt
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