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GFD Blog

The Piggly Crisis

The next time you go to the grocery store, pull out a shopping basket and walk down the aisles, you should think about the fact that the modern grocery store is a result of the innovations of one man: Clarence Saunders.

Saunders’ Self-Shopping Innovation

Until the 1920s, customers did not pick up their own groceries. Instead, they went to clerks who stood behind a counter and put together their purchases for them. Think of the way an old country store was set up.Saunders was obsessed with the idea of efficiency, and thought that customers wasted a lot of time waiting on cler ...

The Perpetuities that are No Longer Perpetual

At the beginning of 2015, the British government had £2.59 billion in undated securities outstanding, representing about 0.23% of the British government’s gilt portfolio. These bonds had no set redemption date, but could be redeemed with three months’ notice. In theory, the gilts could have existed forever.

These securities had originally been issued between 1853 and 1946 and replaced securities that originated back in the 1700s. Unfortunately, they are no more. The last undated gilt, also referred to as a perpetuity because it had no redemption date, was called in by the British gove ...

Biddle’s Bank

“I sincerely believe, with you, that banking institutions are more dangerous than standing armies.” – Thomas Jefferson

At the end of the Bush administration’s time in office, the government, to the chagrin of some and applause of others, instigated one of the biggest bail outs in history. In 2009 the Obama administration continued Bush’s policies in this regard, however, they hoped they’d use the government’s generosity as leverage over the banking industry, arguing for lower bonuses and concessions on increased transparency and regulation. Fast forward ...

United States Bank Database Adds Data on Over 4,000 Banks

Global Financial Data has expanded its unprecedented coverage of U.S. Stocks with the addition of data on over 4,000 banks unavailable from any other source. No other data provider can compete with the robust nature of GFD’s emerging US Stocks Database. Through the efforts of our economists and research department, Global Financial Data has assembled 200 years of stock history covering every bull and bear market. GFD has eliminated both the survivorship bias and the exchange bias by including every US exchange as well as stocks that traded over-the-counter.The United States Bank Database inclu ...

Crazy Chris

 I met Chris while I was a broker. As everyone knows, brokers are salesmen who happen to deal in the stock market. It is better to know nothing about the stock market and be a good salesperson than to have twenty years’ experience in the stock market and have no sales experience.

The first thing the brokerage firm tells you when you are hired is to call up all your friends and get them to invest with you. Once you have gone through your list of friends, then you call your friends’ friends, and then you call the friends of your friends’ friends. When you run out of leads, start co ...

High Noon at the NYSE: Stutz vs. the Shorts

Until 1934 when the Securities and Exchange Commission outlawed rigging the market, Wall Street was occasionally treated to a battle between shorts and long that ended in a corner on the market. A stock is cornered when shorts have sold more shares in a company than are in the outstanding float, and one shareholder owns the floating stock. Since the shorts must cover their positions by buying back the shares they have borrowed, if one person owns all the shares, he can set the price and the shorts have no choice but to pay the price the owner demands. There were only four stock market corner ...

Berkshire Before Buffett

Everyone is aware of the incredible returns that Berkshire Hathaway has provided shareholders during the past fifty years that Warren Buffet has run the company. In the late 1960s, when Warren Buffett became CEO of Berkshire Hathaway, shares in the company were trading at under $20. Today, shares trade around $200,000. During the same period of time, the S&P 500 Total Return Index went from around 38 to 3800. While the S&P 500 increased 100-fold, Berkshire Hathaway increased 10,000-fold. That is what I call value added.

But how well did Berkshire Hathaway perform before Warren Buf ...

The Currency Reform that Created Two Germanies

One question I often receive about the data for the Germany is why the German stock and bond indices had a 90% decline in June 1948. At first, people think there is an error in the data, but German shareholders actually did lose 90% of their capital as a result of the Currency Reform of June 20, 1948 when Reichsmark were converted into Deutschemark.

Despite the loss, the reform benefitted shareholders. who were unable to sell their stocks at the fixed prices the Nazis had imposed during the war. Although the Currency Reform imposed an immediate loss on all shareholders and bondholders, ...

Overend, Gurney & Co.: An Inspiration to Karl Marx and Bear Stearns

One of the most dramatic events in the financial history of Victorian England was the collapse of Overend, Gurney and Co. Its failure had a more severe impact on the London financial market than the collapse of Bear Stearns had on U.S. markets over 140 years later. During the financial crisis of 1866, over 200 firms went bankrupt, including a number of banks. The failure of Overend, Gurney and Co. also led to one of the first trials for financial fraud in history when all six directors were brought before the courts of London to answer for their alleged crimes.

Quaker Origins

O ...

The Death of the Zimbabwe Dollar

The government of Zimbabwe announced this week that they were finally demonetizing the Zimbabwe Dollar. Although the United States Dollar replaced the Zimbabwe Dollar in every day transactions back in 2009, banks still carried accounts that were denominated in Zimbabwe Dollars. Beginning on June 15, 2015, for only 35 quadrillion (35,000,000,000,000,000) Zimbabwe Dollars bank customers will receive one free portrait of George Washington. This opportunity expires in September.

Believe it or not, Zimbabwe will not get in the Guinness Book of World Records for the most insane currency co ...

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