BUSENV 1706: Market Manipulations:
Crises, Bubbles, Robber Barons, and Corporate Saints
University Honors College Course
Fall 2015, 3cr., Mon-Wed, 9:30-10:45am, Room B-75 Mervis Hall, CRN 24170
Prof. Barry M. M
If the market of our dreams does not exist, if perfect markets fail
why do we care?
Because real life markets are:
o Close enough
o Work anyways
o Imperfect but desirable because theyre based on free choice
History of the Business Firm
MONEY AND POWER vid
How is it that we eat better, live longer, travel farther/faster than
yesterdays richest kings?
Kings, lords, nobles, serfs UNTIL 1883
Serf Godrich broke his contract of servitude and became a
Panic of 1907
Earthquake and fire devastate San Francisco in 1906. UK insurers sells
assets to pay off, causing an outflow of gold from the UK. A flow of credit and
gold goes West to finance the rebuilding. The Egyptian stock market crashes
ANDREW CARNEGIE conversation
How did Carnegie make it to the top?
Builds alliances that lock in critical resources and talent (Scott of
railroad, Henry Frick of cokeworks, Bill Jones of millworks)
- EX of Carnegie cleverness : Bill Jones was G
MM Notes 12/7/15
Wil(Liam) Durant Jesse Livermore stock operator: all he did was buy and sell stocks.
Not a financier or a banker or loan shark. Just playing the market
Stocks were hiked, lots of small investors bought, large investors
The Progressive Era
(1888) Casey at the Bat: all the players have irish names. Playing for a crowd
that does not include the mill workers (because they worked all day and on
the weekends) and there was no night games
Workers were irish, but fri
Gilded Age Entrepreneurs
How did Standard Oil come about?
Before the civil war some guy starts drilling for oil in North Western PA
(and leave it a mess, they just dig and if theres no oil they leave the holes
open and debris scattered and leave to dig an
WHAT IS IT?
An operator pays returns to its investors from new capital paid to
the operator by new investors, rather than from profit earned by the
The con artist must draw attention to the offer: high returns with no