Intelligence Briefing: Forest and Trees, Etc.

The Great Panic of 1857 hit London like a ton of bricks. The previous decade had seen a huge expansion in global trade with the UK's exports doubling from 1848-1857. And then it all came crashing down in a wave of bank failures and bank runs.

The British Parliament created a committee, the Select Committee on Commercial Distress, to find out just what had gone wrong. In many respects it was a story very familiar to modern ears: a toxic mix of real estate speculation, securities and commodities bubbles, and credit markets gone wild. It spanned Western Europe to the Baltic Sea to China, with much of it pivoting in London, the world's financial capital.

Parliament and the Select Committee came under tremendous popular pressure to do something, anything, but they were confounded by the reality that so much of the crisis' root causes lay in California gold mines and Swedish banks and Chinese fur pelt trading stations, beyond Britain's shores, out of Parliament's reach.