Year 1920：

u  William C. Durant, the founder of General Motors, tried to stop the slide of GM stock price but in the end only found himself ousted from the GM presidency. J.P. Morgan & Co. and DuPont Co. benefited from Durant’s failure.

u  On September 16, a wagon loaded with bombs exploded in front of 23 Wall Street, then as now the company headquarters of J.P. Morgan. Later, J.P. Morgan decided never to repair the craters on the obverse side of the building from the explosion.

Year 1921:

u  The post-war recession ended quickly, and thanks to the development of the auto industry the U.S. entered a new period of economic prosperity. Wall Street started to expand, with a growth rate even higher than that of the U.S. economy.

Year 1923:

u  Bear Stearns was founded and later grew into a major player in agency bonds trading.

Year 1924:

u  Massachusetts Investors Trust (now MFS Investment Management) was founded on March 21, 1924. It was the first open-ended fund in the world.

Year 1928:

u  The underlying financial crisis began to unfold on Wall Street. Benjamin Strong, the then Governor of the Federal Reserve Bank of New York, realised that speculation was spiraling out of control and took rapid action, raising interest rates three times and reducing money supply. However, he died of illness that October and did not have the opprotunity to save the U.S. from the Great Depression.

Year 1929, spring and summer:

u  Wild speculation and the pursuit of wealth pushed the U.S. stock market to a peak of irrational prosperity. While the Wall Street Journal and the American economist Irving Fisher continued to sending out optimistic signals, the New York Times repeatedly warned investors that crisis was on its way.

u  Charles Merrill, one of the founders of Merrill Lynch, managed to transfer most of his company’s shares into liquid assets before the stock market crash.

Year 1929:

u  The Great Crash of 1929 occurred on Black Thursday (October 24, 1929). That afternoon, Richard Whitney, the Acting President of New York Stock Exchange (NYSE), injected US$20 million into the stock market to restore market confidence. However, after several rebounds, the market continued to plunge. An interim bottom occurred on November 13, with the Dow closing at 198.6, and the U.S. market entered the four-year-long Great Depression.

u  In order to obtain capital, Lehman Brothers invented new financing methods and financial technology including private placement.

The 1920s:

u  Goldman Sachs became one of the first companies to recruit candidates with MBA degrees.