Despite congressional passage of the historic $700 billion bailout legislation, which was signed by President Bush on Saturday, Oct. 4, the Dow Jones Index tumbled the following week with 22%; the worst week in its 118 year history.
Some calculations indicate that since the beginning of the year U.S. corporations have declined about $8 trillion in value ($20 trillion to $12 trillion) and we have seen giants stumble and fade like Countrywide, Washington Mutual, Indy Mac Bank, Lehman Brothers, AIG Insurance and Wachovia.
The current headlines read: Credit Crisis, Financial Meltdown and Stock Market crash.
It all reminds us so much of the year 1906; 102 years ago.
The city San Francisco had just been savaged by a major earthquake measuring 7.8. Over 30 fires caused by ruptured gas mains destroyed approximately 25,000 buildings in 490 city blocks causing a firestorm that lasted for four days and nights.
The event became the greatest loss of life from a natural disaster in California's history.
In the wake of this calamity one man took a stand and on behalf of his bank to help rescue the situation. He was Amadeo Giannini, the founder and President of Bank of Italy. Following the earthquake he sent out a telegram to his clients stating:
“Building Destroyed – Vaults Intact – Credit Unaffected.”
The following day he opened for business and despite circumstances loaned money to as many people as he could to facilitate rebuilding the city, the businesses and thousands of people’s lives.
He continued to create the first state-wide branch banking system and in 1920 renamed his bank, Bank of America. By 2008 Bank of America had become one of the Top 10 banks on the world, and according to assets the largest in the U.S.
Maybe there is a message here for the financial crisis we currently have? |
