The largest-ever one-day percentage decline in the Dow Jones Industrial Average comes not in 1929 but on October 19, 1987. As a number of unrelated events conspired to tank global markets, the Dow dropped 508 points—22.6 percent—in a panic that foreshadowed larger systemic issues.
Via FederalReserveHistory.org,
Authored by Donald Bernhardt and Marshall Eckblad, Federal Reserve Bank of Chicago
The first contemporary global financial crisis unfolded in the autumn of 1987 on a day known infamously as “Black Monday.”
A chain reaction of market distress sent global stock exchanges plummeting in a matter of hours. In the United States, the Dow Jones Industrial Average (DJIA) dropped 22.6 percent in a single trading session, a loss that remains the largest one-day stock market decline in history. At the time, it also marked the sharpest market downturn in the United States since the Great Depression.
The Black Monday events served to underscore the concept of “globalization,” which was still quite new at the time, by demonstrating the unprecedented extent to which financial markets worldwide had become intertwined and technologically interconnected.
Continue reading “31 Years Ago Today, “It Felt Really Scary” – The Fed Remembers ‘Black Monday’”
“It could never happen again…” is the constant refrain of the asset-gatherers and commission-takers around the world as they prepare to defend their livelihoods from yet another delusion-clarifying plunge back to reality for stock prices.
Well, after this week’s bloodbathery – and tearing down of the social-media-will-remake-the-global-economy narrative – many are starting to recognize that all is not well… and perhaps, just perhaps, the support pillars of this flimsy potemkin village we call ‘the stock market’ have already crumbled…
Continue reading “David Rosenberg: “It Was Black Friday Before Black Monday””