THIS BYSTANDER IS is reminded that on March 27th, 1929, the National City Bank said it would make the then huge sum of $25 million available to investors to buy stocks to brake a mini-crash on Wall Street. It worked — for a while. We all know what happened the following October.
If there is a thread of optimism to be drawn from the news that 21 brokerages are to set up a 120 billion yuan ($19.3 billion) fund to stabilize the plunging Shanghai stock market and that the central bank stands ready to rally to the cause, too, it is that authorities worldwide have had so much practice since 1929 in using non-market measures to prop up crashing stock markets they should be getting half-way decent at it by now. (Are there any financial markets that actually work on market principles left anywhere these days?)
But regulators, investors and market practitioners alike would also do well to recall the words Dooley Wilson sang in the classic film Casablanca:
You must remember this
A kiss is just a kiss, a sigh is just a sigh
The fundamental things apply
As time goes by.