Chapter IX, around page 115 in my copy of Reminiscences of a Stock Operator by Edwin LeFevre, is a good place to read about what happened in the past week or so. I recommend this book to anyone interested in trading or in the financial history of the USA. It is fiction but based on interviews with Jesse Livermore (Larry Livingston in the book). Here are a couple of excerpts from the book about the financial crisis of 1907. Keep in mind this book was published in 1923.
He said, “My God, Larry! I don’t know what’s going to happen. I never saw anything like it. It can’t go on. Something has got to give. It looks to me as if everybody is busted right now. You can’t sell stocks, and there is absolutely no money in there.”
Well, that is what I think of when I see the crowd at the Money Post! No money anywhere, and you can’t liquidate stocks because there is nobody to buy them. The whole Street is broke at this very moment, if you ask me!”
The two men, hoping to stave off the most disastrous panic in our financial history, went together to the office of J. P. Morgan & Co. and saw Mr. Morgan. Mr. Thomas laid the case before him. The moment he got through speaking Mr. Morgan said, “Go back to the Exchange and tell them that there will be money for them.”
“But we haven’t got any. We’re loaned up to the hilt,” the banks protested. “You’ve got your reserves,” snapped J. P.
“But we’re already below the legal limit,” they howled. “Use them! That’s what reserves are for!” And the banks obeyed and invaded the reserves to the extent of about twenty million dollars. It saved the stock market. The bank panic didn’t come until the following week. He was a man, J. P. Morgan was. They don’t come much bigger.
Been there. Done that. It was fun to watch though… no? 
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