From Mortgage Crisis to Market Meltdown: The Infamous 1870s

It was a terrible time: banks with bad mortgages started it, complex financial instruments prolonged it, and poor risk analysis made it seem to last forever. This was not 2008, but the Great Depression of 1873.

Lecture Description

Nelson’s lecture demonstrates the eerie parallels between the 2008 downturn and the six-year-plus financial crash in the late 1800’s. Using dozens of engravings from the time, Nelson shows the giddy highs and the scary lows of the first international Great Depression, and its lessons for today. He also covers the peculiar range of government responses that followed, including tariffs and militant nationalism. The problems had emerged around 1870, starting in Europe. In the Austro-Hungarian Empire formed in 1867, in the states unified by Prussia into the German empire, and in France, the emperors supported a flowering of new lending institutions that issued mortgages for municipal and residential construction, especially in the capitals of Vienna, Berlin, and Paris. Mortgages were easier to obtain than before, and a building boom commenced. Land values seemed to climb and climb; borrowers ravenously assumed more and more credit, using unbuilt or half-built houses as collateral. The most marvelous spots for sightseers in the three cities today are the magisterial buildings erected in the so-called founder period.

CATEGORIES

1865-1900 Business and Economics

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Scott Reynolds Nelson

VIEW SPEAKER : Scott Reynolds Nelson


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