By George Grantham Bain - George Grantham Bain Collection (Library of Congress)., Public Domain,

This Week in Trading History: J.P. Morgan Ships In US Bailout from London

This week in trading history saw J.P. Morgan arrange an astounding transatlantic bailout for the U.S., the Hunt brothers began selling off their silver, and Barack Obama was elected as the 44th US President...

2nd November

The Hunt Brothers, who had tried to corner the silver market and failed miserably, faced a mountain of debt and quietly began selling off most of their $350m silver holdings. Despite selling 59 million ounces of silver, the brothers lost around $1 billion in the sale. The Hunt brothers had dropped the price of silver to as low as $6 per ounce when they attempted to conquer the market in the late 1970’s. In November 2020, the price of silver per ounce was $23.64.

Daiwa Bank’s American operations closed as it was revealed that the bank had allowed one of their bond traders to make unauthorised deals, even after he had created a debit of $1.1bn. The bank had helped to cover up his staggering losses.

3rd November

The Dow reached a post-World War High of 119.62, however it continued to drop by 46% for the next two years until bottoming at 63.90 in August 1921.

The NASDAQ closed about 3,000 for the first time as the bubble was reaching its climax. The NASDAQ finished the year up 85% and would continue to climb, by March they closed over 5,000.

4th November

Former Hollywood actor and Republican Ronald Reagan won the U.S. presidential election, beating democrat Jimmy Carter. Reagan was the 40th President of the United states.

Barack Obama was elected as the 44th U.S. President.

5th November

Parker Brothers launched “Monopoly”. They had purchased the game from Charles B. Darrow, who had sketched his version of the game on an oilcloth, and was selling it to his friends and relatives. Unable to meet demands, he sold to the Parkers for an undisclosed amount. The game originated from Lizzie Magie’s game ‘The Landlord’s Game’ which she created to demonstrate her belief in the passing of a single federal tax based on land ownership.

6th November

J.P. Morgan organised a boat from London, with $7m worth of gold aboard, to arrive in the U.S. in order to bailout the financial system during the panic. Following behind the first boat was the RMS Lusitania, containing $10m in gold. J.P. Morgan’s plan work and eventually the panic subsided.

Herbert Hoover was elected President of the United States. During his term the Dow fell more than 80%, making it the worst stock market performance under any president.

After last week’s Black Monday and Black Tuesday, stocks continued to decline and, on this day, dropped 9.9%, with the Dow closing at 232.13. However, this was far from the end as stocks didn’t bottom until July 1932 when the Dow closed at 41.22.

7th November

At noon a news flash was announced stating “GERMANY GIVES UP. WAR ENDS”, prompting the New York Stock exchange to close at 2pm to celebrate. However, the news proved false, and an armistice wasn’t signed until 11th November. The Dow closed up 1.14% on hearing the news, however as government spending subsided and factories laid off jobs the U.S. economy quickly went into recession and the stocks markets would struggle for a long time after.

8th November

The Dow closed at 42.15, a low during the “Rich Man’s Panic”. The panic was called this because it was considered that only rich people held stocks and bonds after a sharp selloff appeared the year before, and primarily large trust companies experienced the decline.