Financial crisis of '08 among the worst ever From SignonSan Diego:
"Scott Reynolds Nelson, a history professor at Virginia's College of William and Mary, suggests that 2008 may be much more like 1873 than 1929.Interesting. Here is Nelson's piece from the Chronicle. I won't go into all of it, but here is the conclusion:
In 1873, the crisis started in Europe, where cheap mortgage terms spurred a residential real estate bubble. When the bubble popped, bankers in London tightened their credit terms, triggering a financial crisis in the United States, where banks already were overextended with speculative loans to railroads and railroad-related real estate.
“The echoes of the past in the current problems with residential mortgages trouble me,” Nelson wrote in the Chronicle of Higher Education. “As in 1873, a complex financial pyramid (in the past decade) rested on a pinhead. Banks are hoarding cash. Banks that hoard cash do not make short-term loans....”
The result in 1873 was an international depression that sparked double-digit unemployment rates, corporate bankruptcies and widespread labor unrest. The United States did not fully recover until the mid-1890s, by which time it endured another credit crisis, known as the Panic of 1893.
The response to the current crisis bears resemblance to past solutions."
"In the end, the Panic of 1873 demonstrated that the center of gravity for the world's credit had shifted west — from Central Europe toward the United States. The current panic suggests a further shift — from the United States to China and India. Beyond that I would not hazard a guess."