This week in trading history sees a lot of individuals going down and taking the economy with them. William Duer started the 1792 panics with bad speculations, Andrew Dexter made some phony bills and the Hunt brothers etched their name in trading infamy...
3.2% beer and wine sales were made legal in US as the prohibition era came to an end. Now that calls for a celebration, beer anyone?
London reopened its gold market for the first time since 1929, at $35 an ounce. Today an ounce of gold is worth around $1,574.80.
The Dow Industrial Average rose 6.84% due to the unveiling of the Obama administration's plans to set up a $1 Trillion fund for banks to offload bad assets.
Today the panic of 1792 reached its peak and 25 banks failed, taking down some of America’s wealthiest families with them. What sparked this reaction was William Duer being sentenced to debtor’s prison after his speculation in the Bank of the United States shares and owing the government more than $250,000. Today that would equate to around $6.1 million. The financial panic lasted until the end of April.
The UK abolished the slave trade. The House of Commons passed a law forbidding the capture and transport of slaves. A fine of £100 per slave was issued to any offending captain found harbouring a slave. However, it's said that trafficking between the Caribbean Islands didn’t actually end until 1811.
The Farmers Exchange Bank of Glocester in Rhode Island went bust. The crash was due to Andrew Dexter, a lawyer and financier, gaining control of the bank and issuing more bank notes than the bank could have possibly redeemed. At the time of the bank’s failure there were around $760,000 worth of bank notes still outstanding, with the bank only having $83 in their back pockets.
Exactly 8,246,740 shares were traded on this day, making this a new record for the New York Stock Exchange as most traded in a single day to date. This day was an insight into the rising unease of investors over trading on the market, leading up to the great depression.
Andy Grove announced he was stepping down as the CEO of Intel Corp. The year in which Grove stepped down the company’s average stock price was 21.36. After his successor Craig Barrett took over the reins, the average price rose to 49.06 in 2018 when Bob Swan took over as CEO.
Five of American International Group’s (A.I.G’s) insurance executive were convicted of fraud. However, the case turned into a decade-long battle which ultimately ended in a settlement. Maurice Greenberg, the former chief executive, and Howard Smith, the former chief financial officer, agreed to pay up $9.9 million, a fraction of the $50 million the state was fighting for.
Also on this day, Ford sold their Land Rover and Jaguar brands for $2.3 billion…
Sir Frederick Henry Royce was born on this day. Royce was most famous for being an industrialist whose cars still today remain an enduring symbol of wealth. It wasn’t until 1904 when he produced his first lot of cars, which caught the eyes of C.S. Rolls. Two years later the two merged together making Rolls-Royce Ltd. The iconic Rolls-Royce Phantom now starts at a price of around $450,000.
Today was named as ‘Silver Thursday’ after the Hunt brothers attempt at cornering the Silver market. On this day the price of silver fell 33%, totalling a loss of more than 50% in just four days. Due to the Hunt Brother’s over borrowing, and unable to meet their margin call of $130 million, they not only had to sell their silver stocks but also their stock investments and government bonds which ultimately brought everything down. March 27th would also mark the last day the S&P 500 ever closed below 100. Silver has never really recovered from its crash; the price of Silver today is $12.79 per ounce.
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Former president “Ike” Eisenhower died at 78 of a heart condition. The markets closed for his funeral.
If you read last week's This Week in Trading History, you’ll know that today marks the first time the Dow Jones Industrial Average closed above 10,000.