Page 48 - THE MARKET WHISPERER

46 PART 1 - Allow Me To Introduce You… To The Stock Exchange

Despite all these permutations, Wall Street has basically remained
the same. Jesse Livermore traded on Wall Street from the end of the 19th
century to the early 20th century. His book How to Trade in Stocks, and
Lefèvre’s Reminiscences of a Stock Trader, a biography of Livermore, show

that Livermore would have had no trouble trading successfully were he

alive today.
Eighty years have passed since the 1929 Crash, and it seems that the

lessons learned from that devastating event have been forgotten. Currently,
at the time of this book’s writing, a new chapter is being written in Wall
Street’s history. The credit crunch, known as “The Sub-Prime Crisis,” hit
Wall Street like a bolt of lightning. Despite a fairly quick recovery developing

during the two years from the lowest point of the slump, its lessons are

still unclear. The crisis hit with full force across the entire financial system
of the US, and first and foremost on Wall Street, so much so that some feel
Wall Street is losing its top billing in international finance markets. But
before we mourn Wall Street, it’s worth checking how it all began.

Wall Street is in New York’s Lower Manhattan. It was so named because
in 1653, a wall was built there by Peter Stuyvesant, the Dutch governor of
the city then known as New Amsterdam, to protect the city’s residents from
the “Indians” as they were known at the time, and from a possible British
invasion. The wall itself was never put to the test, but lent its existence to

the name of the street running alongside it.

SMART Regulation, like the stock market, develops as a result of
MONEY crises that lead to bubbles. But unlike a bubble, it never
bursts. By nature, it always progresses and never regresses.

In 1789, to cover debts of the government and its colonies, the first
United States Congress, via its central bank, issued what were known as
Treasury Bonds to the value of $80 million. These were sold to the general
public. In those days, Manhattan’s population numbered around 34,000
and Wall Street was still an unpaved dirt road. Along its sides, trading
houses stood and transacted international commodity sales. Very quickly,
Wall Street’s trading houses also began selling lottery tickets, stocks, and
bonds. The hottest items during that period, and in fact the item around
which speculative trading began, were bonds. In those days, a person
wishing to buy or sell stocks or bonds had to issue a public notice or sell to
friends. As demand developed, two renowned trading houses of the time,