COMMENT:  Hi Marty,

I quite enjoy your writing.  My understanding regarding the panic of ’07 is that it was at least partly the result of earthquake and San Francisco fire of 1906. Really looking forward to your book(s), especially the rewrite of “Greatest Bull market” as I believe you will be pointing out the sorry history of how we got into this mess in the late 19th century. Also, Keep up the “Take No Prisoners” approach with the opposition.  The Stakes are too high.

Eric

REPLY: Yes, the San Francisco Earthquake resulted in capital flowing from the East to the West Coast. Insurance companies in Germany were also hit and they too had to pay claims in California. This is why they set up the various branches of the Fed to manage this internal capital flow problem between regions.

The Copper Manipulation was the straw the broke the camel’s back. It was the final event that set off the Panic of 1907. However, there was already a cash drain from East to West, which made the NY banks vulnerable.