STOCK MARKET FORECAST BY KPASTROAKELLA

100 years of financial disasters

This isn't the first financial meltdown, and it won't be the last. But we are a fast-learning species, and we've figured out a few ways to cope along the way.

Panic of 1907

Problem:A series of bank runs, a stock market crash, and deep recession. Banker J.P. Morgan finally brought together financial leaders to halt the panic.

Outcome: Congress established America's first true central bank, the Federal Reserve System, in 1913 in the hope of preventing such panics.

By Beth Kowitt and Justin Fox

NEXT: Great Depression

Great Depression

Problem: First came the stock market crash of 1929. A year later a wave of bank failures began that didn't end until Roosevelt took office in 1933. GDP dropped 26% and unemployment hit 24%.

Outcome: The FDIC, the SEC, and a host of new institutions and financial regulations.

NEXT: 1970s inflation

1970s inflation

Problem: The country's only great peacetime inflation, sparked by an oil embargo, the breakdown of the Bretton Woods monetary system, and poor Fed decisions.

Outcome: New Fed chairman Paul Volcker cracked down, bringing on a deep recession.

NEXT: Japan's lost decade

Japan's lost decade

Problem: After a spectacular 1980s boom, Japan's real estate and stock markets crashed, throwing the economy into a prolonged malaise.

Outcome: Early denial of the problem by the Japanese government taught policymakers elsewhere the value of responding quickly and decisively.

NEXT: Asian contagion of late 90s

Asian contagion of late 90s

Problem: The collapse of the Thai baht in 1997 sparked a crisis that spread across East Asia. The International Monetary Fund stepped in to help, but its draconian terms brought widespread criticism.

Outcome: A still-unresolved debate about how currency crises should be managed.

source:cnnmoney
courtesy :fortune magzine&cnn money.com

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