Editor's note: The markets and our offices are closed Monday, May 25 for Memorial Day. Because of this, we won't publish Altimetry Daily Authority. Please look for your next edition on Tuesday, May 26.
On behalf of the Altimetry team, we wish you a safe and relaxing holiday weekend.
New York's wealthiest financiers walked into a private library... and heard the locks click behind them...
Their captor was none other than industry titan J.P. Morgan himself. And he wouldn't let them leave until they saved the U.S. economy from total collapse.
The fateful gathering was the result of a stock market ambush. In October 1907, fast-rising financier F. Augustus Heinze and his associates attempted a short squeeze of United Copper. But the scheme backfired, and Heinze lost his fortune.
Then came a question with dangerous implications... What else had Heinze touched?
The answer was "plenty." He and his ally Charles Morse had ties to a web of banks and trust companies. When that information came to light, depositors made a run on the banks.
And the fear kept spreading...
Trust companies were more vulnerable in a panic than ordinary banks...
They took deposits and made loans just like banks, yet they carried much smaller cash reserves. So a New York bank called the Knickerbocker Trust became the market's next target.
Knickerbocker's president, Charles T. Barney, had ties to the Heinze-Morse circle. Once that connection became public, help started to disappear...
The National Bank of Commerce stopped clearing Knickerbocker's checks. The New York Clearing House refused support.
There were simply no buyers left on Wall Street... and that was the final straw.
On October 22, depositors pulled roughly $8 million from Knickerbocker in a matter of hours. The trust shut its doors before the day was over.
From there, the panic outran the original scandal. And without someone to rescue the financial system, it was bound for collapse.
The U.S. had no central bank back then...
Nobody had to step in. It was up to a handful of private bankers to calm the market down.
So on November 3, famed financier Morgan summoned the trust-company presidents to his library on Madison Avenue. His goal was simple – get the bankers to commit enough capital to stabilize the market.
The doors were shut tight so no one would be able to leave over rumors or a fresh wave of fear. As panic ran rampant outside, Morgan forced the men with money to sit still until they could come to a workable solution.
Negotiations dragged deep into the night. Morgan pushed, cajoled, and browbeat the financiers until they agreed to a rescue plan. And just after 4 a.m., they signed the pledge.
The market finally had a backstop. The panic began to ease. Less than a decade later, in 1913, America built the Federal Reserve... so we'd never have to rely on bankers in a locked room ever again.
More than a century later, though, one thing hasn't changed...
Investors still abandon good businesses when panic sets in.
When the housing crisis hit in the mid-2000s, plenty of perfectly good homebuilders got whacked alongside the ones that deserved it.
As interest rates surged in 2022 and 2023, loan buyers disappeared. The market fled loan originators and bank stocks in droves... whether they were on solid footing or not.
And earlier this year, AI fears pushed investors out of software stocks indiscriminately. (Folks dubbed this panic-selling the "SaaSpocalypse.")
We're not saying you should buy anything and everything that falls during a crisis. Some of these stocks do deserve to be punished. But not all of them.
Pay close attention when the market starts pricing in panic. The best buying opportunities are often hiding in the collateral damage...
Regards,
Rob Spivey
May 22, 2026
