Echoes of the 87 crash, the closest crash in modern history, still reverberate in the world to this day.
Well, we probably know by know that the 2008 episode is surpassed the 1987 crash is the most dramatic and traumatic financial disaster that the new generation has experienced.
In financial markets, Black Monday refers to Monday, October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short period. The crash began in Hong Kong, spread west through international time zones to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1739 (22.6%). S&P fell 20.5%.
By the end of October, stock markets in Hong Kong had fallen 45.8%, Australia 41.8%, Spain 31%, the United Kingdom 26.4%, the United States 22.68%, and Canada 22.5%. New Zealand's market was hit especially hard, falling about 60% from its 1987 peak, and taking several years to recover.
The Black Monday decline was the largest one-day percentage decline in stock market history. Other large declines have occurred after periods of market closure, such as on Monday, September 17, 2001, the first day that the market was open following the September 11, 2001 attacks.
Potential causes for the decline include program trading, overvaluation, illiquidity, and market psychology
However, there was not much a recession after the 87 crash. At the time, many people thought the stockmarket was overpriced and did not feel there was much more to worry about. Also, many financial experts blamed the crash on a kind of programmed trading called portfolio insurance. – Robert Shiller Crisis of Confidence, AFR 22-23/08.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment