I am thrilled to be working on this in-depth examination of the historic Wall Street crash of 1987, whose cautionary lessons remain urgently relevant — but dangerously forgotten.
For decades on Wall Street, “Black Monday” has meant October 19, 1987.
Despite all the harrowing days since then — the 1998 currency panic, the 2001 terrorist attacks, the 2008 crisis — Black Monday still stands as the worst day in American stock market history. No other crash, not even the historic plunge of 1929, comes close.
On Black Monday 1987, the Dow Jones Industrial Average plummeted 22.6 percent, or 508 points. To see The New York Times front-page report on that event, check here: http://nyti.ms/1kaZ84r.
In the stock market of early 2014, a one-day nosedive on that scale would mean headlines screaming: “Dow Plunges 3,660 Points!” Those headlines are almost unthinkable for us today. But a one-day drop of almost 23 percent was truly unthinkable for the men and women of 1987. After all, we can look back on their experience but when they looked back, they saw nothing that remotely resembled Black Monday — not the Crash of 1929, not when America went to war, not even after presidential assassinations. Until that day in 1987, a bad day in the stock market meant a decline of perhaps 4 or 5 percent; a horrible day of epic proportions meant a drop of 11 or 12 percent, as in 1929.
But on Black Monday 1987, the unthinkable suddenly became the unforgettable, a market crash so steep and so fast it seemed the market would simply shake apart like an airplane plunging to earth.
Black Monday was evidence that a new and frightening era had arrived on Wall Street – one in which computer power and human greed combined to form a juggernaut that rumbles unpredictably through the market s to this day.
The road that led to Black Monday wove through Chicago, Washington, London, Tokyo and New York. The men and women who traveled that road lived through a meltdown they would never forget.
But Wall Street itself has been far too quick to forget the urgent lessons revealed by the road to Black Monday — lessons even more relevant in the global computerized markets of today. Indeed, by the 20th anniversary of Black Monday in 2007, the financial community’s primary conclusions about the 1987 crash were that, well, things were different back then and nothing like that could happen today.
This was the Wall Street Journal’s comfortable assessment in those sunny days before the 2008 crisis: http://on.wsj.com/1cMpl7U
Bringing those harrowing, watershed days to life and excavating their overlooked but still relevant warnings for future generations are the goals of The Wasted Crisis, my fifth book of financial history.
To my delight, this book also reunites me with Paul Golob at Henry Holt, the wonderful editor who guided my work on my bestselling Madoff book, The Wizard of Lies. Paul has an almost magical gift for finding the most dramatic path through a story, and we are both convinced this topic covers territory that is both fascinating and largely unexplored. I’m already working to track down witnesses and documents — it’s a joy to be on the book trail again!
For decades on Wall Street, “Black Monday” has meant October 19, 1987.
Despite all the harrowing days since then — the 1998 currency panic, the 2001 terrorist attacks, the 2008 crisis — Black Monday still stands as the worst day in American stock market history. No other crash, not even the historic plunge of 1929, comes close.
I am thrilled to be working on this in-depth examination of the historic Wall Street crash of 1987, whose cautionary lessons remain urgently relevant — but dangerously forgotten.
On Black Monday 1987, the Dow Jones Industrial Average plummeted 22.6 percent, or 508 points. To see The New York Times front-page report on that event, check here: http://nyti.ms/1kaZ84r.
In the stock market of early 2014, a one-day nosedive on that scale would mean headlines screaming: “Dow Plunges 3,660 Points!” Those headlines are almost unthinkable for us today. But a one-day drop of almost 23 percent was truly unthinkable for the men and women of 1987. After all, we can look back on their experience but when they looked back, they saw nothing that remotely resembled Black Monday — not the Crash of 1929, not when America went to war, not even after presidential assassinations. Until that day in 1987, a bad day in the stock market meant a decline of perhaps 4 or 5 percent; a horrible day of epic proportions meant a drop of 11 or 12 percent, as in 1929.
But on Black Monday 1987, the unthinkable suddenly became the unforgettable, a market crash so steep and so fast it seemed the market would simply shake apart like an airplane plunging to earth.
Black Monday was evidence that a new and frightening era had arrived on Wall Street – one in which computer power and human greed combined to form a juggernaut that rumbles unpredictably through the market s to this day.
The road that led to Black Monday wove through Chicago, Washington, London, Tokyo and New York. The men and women who traveled that road lived through a meltdown they would never forget.
But Wall Street itself has been far too quick to forget the urgent lessons revealed by the road to Black Monday — lessons even more relevant in the global computerized markets of today. Indeed, by the 20th anniversary of Black Monday in 2007, the financial community’s primary conclusions about the 1987 crash were that, well, things were different back then and nothing like that could happen today.
This was the Wall Street Journal’s comfortable assessment in those sunny days before the 2008 crisis: http://on.wsj.com/1cMpl7U
Bringing those harrowing, watershed days to life and excavating their overlooked but still relevant warnings for future generations are the goals of The Wasted Crisis, my fifth book of financial history.
To my delight, this book also reunites me with Paul Golob at Henry Holt, the wonderful editor who guided my work on my bestselling Madoff book, The Wizard of Lies. Paul has an almost magical gift for finding the most dramatic path through a story, and we are both convinced this topic covers territory that is both fascinating and largely unexplored. I’m already working to track down witnesses and documents — it’s a joy to be on the book trail again!