Lessons From 'The Panic of 1907'

I'm not sure many with actual knowledge of financial panics really believe they are the product of one cause -- like greed or venality, as they note, referencing a single book on the stock market bubble of the late 1990s. By the same token, I don't believe many experts feel they are solely the product of time-specific causes. There is general acceptance of the forces of historic repetition. The only questions are when and how.

In the "Lessons" chapter, Bruner and Carr lay out some parameters, but unlike the story of the actual panic -- which is told in detail -- this important premise, meant to impart wisdom going forward, is drawn too widely, a little like a horoscope.

What is described as "adverse leadership" ranks as cause No. 4 in the chapter. But defined as "mistakes of leadership" that can "help to create an environment vulnerable to shocks," the authors typically don't mention how mistakes of leadership, so prevalent in our history, only rarely spark full-fledged panics.

"Unequally distributed information" is also noted as a contributor to the advent of financial panic. But take this as fact and there might not be any panics in our future. Information is now distributed for free online. Few investors lack access to it. In fact, the smarter observation might be the fact that with information now distributed so equally, widely and freely -- conventional wisdoms congeal quicker than ever, setting the stage more than anything for a future panic.