Sunday, September 29, 2013

A Bomb on Wall Street

Soldiers and police establishing line at door of the Morgan Bank while bodies of the victims are lying in front of the Sub Treasury. From loc.gov

Does any remember where they were on September 29, 2008? I was working in a tan cubicle at Wells Fargo, trying my best to eaves drop on conversations to find out what the heck was going on.

Does anyone remember why the Dow Jones Industrial Average dropped 778 points on that fateful Monday? I won't make you wait for it. Congress failed to approve Secretary Paulson's proposed bailout of the big banks. (A few days later they capitulated, and the Dow regained 115 points on the news).

But it wasn't just stocks in free fall. The 1-year Treasury bill also fell that day, to near zero, "meaning investors were willing to accept no return just for the assurance that they would get their money back," explained the New York Times. It's funny, because five years later investors are willing to accept even less of a return (green line in chart below).


One could say that Congress' failure to pass the bailout "dropped a bomb" on Wall Street. But that would be merely metaphoric. In September 1920, a real bomb was dropped on Wall Street, killing 38.

We still don't know who is responsible for this bombing. Historians believe it was carried out by Galleanists, a group responsible for a series of attacks the previous year. These anti-capitalists were, among other things, angry over the lives lost in World War I. Recall from a previous Banker's Notes that the war was financed in part by JP Morgan Jr.

This bomb, carried by a horse-drawn wagon (the horse was also killed), was placed near JP Morgan's office, however, none of the Morgan crew were injured. Most of the fatalities were people from "lowlier stations, clerks and holders of similar places" reported the Sun, who also described the scene (warning: the below quotation is gruesome).

"Lying queerly and awkwardly huddled in front of the Assay Office were six human bodies or what was left of them. In just as grotesque scrawls four more bodies lay against the heavy wall of JP Morgan's. Down in the gutter before the Schulte cigar store, 36 Wall St., lay three more. Trying to crawl five men and women were flopping on the steps of the Sub-Treasury. A hand hung limply over the cornice that crowns the high front of the Morgan office. A woman still alive (she was screaming) was jammed against the Assay office door. Later men went to her assistance and fell back sickly, because she had no arms."


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Flannery O'Connor

You shall know the truth and the truth shall make you odd.