Submitted by Bryan Taylor , Chief Economist of Global Financial Data. This week marks the hundredth anniversary of the beginning of World War I. On June 28, , Austrian Archduke Franz Ferdinand was assassinated in Sarajevo. This event led to a month of failed diplomatic maneuvering between Austria-Hungary, Germany, France, Russia, and Britain which ended with the onset of the Great War, as it was originally called.

Austria-Hungary declared war on Serbia on July 28, causing Germany and Russia to mobilize their armies on July When Russia offered to negotiate rather than demobilize their army, Germany declared war on Russia on August 1. Germany declared war on France on August 3, and when Germany attacked Belgium on August 4, England declared war on Germany.

Europe was at war, and millions would die in the battles that followed. The impact on global stock markets was immediate: Although no one would have predicted this result at the beginning of July , by the end of the month, European stock exchanges were making preparations for the inevitable war and its impact.

Ironically, it was because of the openness of global financial markets before the war that the global closure of stock markets occurred. At the beginning of , capital was free to flow from one country to another without hindrance. A country such as Russia would issue a bond that was listed on the stock exchanges in London, New York, Paris, Berlin, Amsterdam and St. Differences in exchange rates between countries could be arbitraged by buying and selling bonds in different markets.

In effect, this made European stock exchanges a single, integrated market. In , currency flowed between countries with lightning speed. During the Napoleonic wars, money could only move as quickly as a ship could venture from one country to another. By , cables stretched across the oceans of the world, and money as well as stock orders could be wired telegraphically from one corner of the world to another in minutes.

Traders throughout the world could sell bonds and shares instantly, and it was the fear of massive selling, and the impact this would have on global markets that led to the shutdown of European exchanges. There was a concern that investors would try to repatriate their money leading to massive selling, a sharp fall in prices, and large amounts of capital flowing out of one country and into another.

The impact of selling on brokers and jobbers was exacerbated by the way shares were traded on the London Stock Exchange. Individual trades were made on a daily basis, then carried until Settlement Day when trades were matched and crossed. Brokers would make up the surplus or deficit on their accounts by settling outstanding trades with cash.

As long as there were no significant swings in stock or bond prices, brokers had sufficient capital to settle their accounts. However, since traders relied on credit, large swings in prices could and would bankrupt many of the brokers, worsening the financial panic. To avoid this problem, stock markets were closed until a solution could be found.

Of course, to investors not being able to buy or sell shares is even worse than selling them at a loss. Although stocks could not be traded on the main exchanges, over-the-counter markets replaced exchanges for those who were desperate enough to sell.

Although the NYSE was closed between July 30 and December 12 of , stocks were quoted by brokers and traded off the exchange. Global Financial Data has gone back and collected stock prices during the closure of the NYSE to recreate the Dow Jones Industrial Average while the NYSE was closed.

We collected the data for the 20 stocks in the new DJIA 20 Industrials and calculated the average of the bid and ask prices from August 24, to December 12, This enabled us to discover that the bottom for stocks actually occurred on November 2, when the DJIA hit Few people realize that stocks in the US had already bottomed out and were heading into a new bull market when the NYSE reopened on December 12, The DJIA did not revisit this level until the Great Depression in Although the market declined with the onset of war, investors eventually realized that war in Europe would bring opportunities to American companies to sell industrial goods and war materiel.

Once this fact settled in, the stock market rose steadily for the next year. The NYSE reopened trading for bonds under restrictions on November 28th; the San Francisco Stock and Bond Exchange reopened on December 1st; and the NYSE resumed trading at pegged prices on December 12th, though the prospect of war profits soon made these restrictions irrelevant.

As the graph below shows, the Dow Jones Industrial Average almost doubled in price in the year following its bottom in November The market paused, then had another rally into before falling back once investors realized the strong profits they had predicted from the war would not be realized.

In Europe, the problem of preventing catastrophic declines in stock prices was solved by putting a floor on share prices. Initially, stocks and bonds were not allowed to trade below the price they had been trading at on July 31, The government also placed restrictions on capital, limiting or preventing large flows of capital out of the country for the remainder of the war. With these restrictions in place, markets reopened in Europe.

The London Times began printing stock prices for London and Bordeaux on September 19th and for Paris on December 8, In January , all shares were allowed to trade on the London Stock Exchange, though with price restrictions.

Petersburg exchange reopened in only to close two months later due to the Russian Revolution. The Berlin Stock Exchange did not reopen until December Unlike the United States, stocks on the London Stock Exchange declined in price during World War I.

Stock Market Closed – What Is The Stock

This was due not only to the decline in earnings that occurred and general selling of shares to raise capital, but just as importantly, because of the lack of new buying and the shift of capital to government war debt. British companies were allowed to issue new shares only if the issue was in the national interest, and foreign governments and companies were not allowed to issue any new shares.

The British government wanted to insure that all available capital was used to fund the growing war debt. The performance of the London Stock Exchange between and is shown below. As can be seen, stocks lost value continually during the war, hitting their bottom only in , despite the general inflation that occurred in Britain during the war, which normally would have carried prices upwards.

The Long-Term Impact of World War I. World War I destroyed the global integration of capital markets. The Gold Standard never returned despite attempts after the war to revive it. The system of issuing bonds and shares internationally failed to recover from the war, and stock exchanges listed fewer international shares. The ownership of stocks and bonds from other countries shrank dramatically.

Exchanges were subjected to extensive regulation that did not exist prior to the war. Germans were not even allowed to trade on the London Stock Exchange for years after the war was over.

London lost its place as the center of global finance during the war as its role as the center of global finance was passed on to New York. Nevertheless, New York was never able to take on the pivotal role in capital markets that London held prior to World War I.

After the war was over, financial markets had to deal with the dislocations created by the war: Governments and stock exchanges did learn their lessons from World War I. When World War II began, the London Stock Exchange closed for only a week, and the New York Stock Exchange never closed during World War II, save for August 15thth, when the NYSE closed to recognize V-J Day and the end of WWII.

The Berlin Stock Exchange remained open during World War II, though price floors and capital restrictions kept the prices of shares from falling until the devaluation of Only after the fall of Communism did stock markets become as globally integrated as they had been before Though the focus of the hundredth anniversary of World War I will be on the massive destruction of World War I, the deaths of millions, and how World War I laid the foundations for World War II, the impact on stock markets and international finance should never be forgotten.

GLOBAL MONEY MATRIX SELF DESTRUCTS. The FOUR HORSEMEN Herald the Death Knell of Predatory Capitalism. So far, it looks as if the only thing we've learned from history is how to kill each other better and faster.

The insiders know history and use it to their advantage. Glass Steagall was dismantled so that the the roaring 20's financial fraud could happen again. The lesson had not been forgotten.

Am I the Crazy Uncle for being somewhat of a Prepper.

London, England Stock Market Closes (31 July ) | First World War

You know, the type the NSA likes to spy on. A friend of mine is the "Chicken Little" of his extended family, neighborhood and work. He has warned others around him repeatedly about what is coming and the need to get hold of guns, gold and silver , grub and ground now.

He has never pushed his opinions, but offered them up as informative comments to discussions by the sheeple as to propaganda media memes--unemployment down, war good, etc. His extended family, neighbors and colleagues have consistently chided him or mocked him derisively over being a "prepper. They really had a field day when he purchased a rundown home on some rural land.

However, now he reports that more and more people are starting to tentatively ask him questions that reveal that they are starting to feel or get it and are concerned with what the future holds for them. Twilight Zone "The Shelter". I'd say if some guy ever offers you the opportunity to be on a reality show, punch that guy in the nose.

He'll be overrun by those who didn't prepare. Unless of course he starts pinging them from the roof top. Go to the churches right now and ask for a members list. Tell them you are soliciting to save African Ebola patients, or scrubbing neighborhoods for illegal sanctuaries. Funny you say that.

WHEN IS THE STOCK MARKET CLOSED????

His first improvements to the rural property were to, using a downloaded Army manual, clear possible hiding spots, avenues of approach and create clear "fields-of-fire.

He also setup alternative firing positions outside the home. Some are raised earth, others are disguised objects like an old car door filled with concrete. When he replaces the dry wall, he plans to add 3 x 3 steel plates below windows and in other strategic places to provide protection to those firing-positions, as bullets can travel through a lot of dry wall.

He is also planning "sneaky-holes. He says that ultimately the benefit of doing what he is doing is that he will soon know every square inch of the property intimately. Now, writing this make him sound nuts, but he is not preoccupied with this, or does he think that the "zombies" will attack or take over the world. It is just part of the upgrades as he goes along--"Situational awareness and preparedness" as he likes to say.

This is a good question. Hard to answer as well since incredibly we are bringing infected people into the USA. We did have a massive influenza outbreak in the USA prior to World War I which killed millions.

The stock market was not closed for that. They won't need to close the market for WWIII, they'll be vaporized in a matter of nano-seconds And anyone left after that will die when the worlds nuclear reactors all melt down at once, due to lack of power to keep them cooled.

WW4 might be fought with sticks and stones, but it won't be Homo Sapiens doing the fighting. Might be the descendents of the cockroach. Ive heard or read that somewhere.

Why do you think they ran McShitstain and Romney Go look it up and confirm it. All realted, family going to war against itself. Killing millions in between but who cares.

Jim, that is correct. The monarchs in Europe were all interrelated between the two main powerful houses, Hapsburg and Bourbon.

Really the best way to describe it would be inbreeding. In The next war, collapsing your enemies economy will be the strategy, the alliances will be created and formed by aligning economic interest, indifferent to political ideologies,.

The kick is gone. Addicted to debt, the addict begins to see that there is no hope. Over time we tend to forget the path we have taken to reach where we are. I'm amazed at how our day of reckoning is always being kicked out a year or two and never tomorrow. It is as if we can't handle what is coming at us and need more time. For a long time I have been trying to develop a scenario for a market "super crash" and a reasonable map that would arrive at such a situation.

Below is an article looking at how it could happen sooner rather than later. Here's our Cookie Policy. How to report offensive comments. Home Contributors Newsletter Donate More Store ZH-TShirt Glossary Archive Manifesto RSS.

INTRoDuCiNG ReBu, THe WORLD'S FiRST RoBoT CeO Aug 1, Submitted by Bryan Taylor , Chief Economist of Global Financial Data August When Global Stock Markets Closed This week marks the hundredth anniversary of the beginning of World War I. Open Financial Markets Led to Closed Exchanges Ironically, it was because of the openness of global financial markets before the war that the global closure of stock markets occurred.

The War Drives Stock Prices Down Of course, to investors not being able to buy or sell shares is even worse than selling them at a loss. The Closure of European Exchanges In Europe, the problem of preventing catastrophic declines in stock prices was solved by putting a floor on share prices. The Long-Term Impact of World War I World War I destroyed the global integration of capital markets.

Germany New York Stock Exchange Great Depression Capital Markets Bond Dow Jones Industrial Average Market Crash France Belgium. Printer-friendly version Aug 1, Comment viewing options Flat list - collapsed Flat list - expanded Threaded list - collapsed Threaded list - expanded.

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Kirk2NCC Aug 1, First we take Berlin and Gaza, then we take Moscow and Tehran. Latina Lover Kirk2NCC Aug 1, Truthseeker2 Latina Lover Aug 1, 1: Stock market will become extinct. Truthseeker2 WhyDoesItHurtWhen iPee Aug 1, 1: Remington IV Kirk2NCC Aug 1, 3: If more "Is" learned a thing or two, "we" might be better off. Pure Evil kchrisc Aug 1, 1: PartysOver Aug 1, Stuff gonna get ugly. Only a matter of time. Not too much laughing now. Uber Vandal kchrisc Aug 1, 1: If the Ebola outbreak causes Martial Law and a countrywide curfew, will the exhanges close then?

NoDebt Aug 1, They didn't close during WWII. We'll have to see how it goes with WWIII. Coletrane NoDebt Aug 1, Engali NoDebt Aug 1, Beam Me Up Scotty Dr. Engali Aug 1, 1: Engali Aug 1, TPTB know they're in trouble and they are doing their best to drag us to war. Engali Coletrane Aug 1, 1: Idaho potato head buzzsaw99 Aug 1, 2: Due to the lack of trained trumpeters, the end of the world will be postponed for three months.

Jim Cramer Aug 1, Jim Cramer Aug 1, 1: Price floors and closed markets. Shorts don't get to win. A82EBA Aug 1, SelfGov Aug 1, 2: Yes make sure you never mention the fact that UK coal production peaked in JRobby financialrealist Aug 1, 4: Political ideologies are for the hopeful. Economic domination is for the Banksters.

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Best Buy with bearish spreads.

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