Last edited by Nigami
Saturday, February 15, 2020 | History

2 edition of Preliminary observations on the market crash of October 1987 found in the catalog.

Preliminary observations on the market crash of October 1987

Richard L. Fogel

Preliminary observations on the market crash of October 1987

statement of Richard L. Fogel, Assistant Comptroller General, General Government Programs, before the Subcommittee on Financial Institutions, Supervision, Regulation and Insurance, Committee on Banking, Finance and Urban Affairs, United States House of Representatives.

by Richard L. Fogel

  • 394 Want to read
  • 39 Currently reading

Published by U.S. General Accounting Office in [Washington, D.C.?] .
Written in English

    Subjects:
  • Stock exchanges -- United States.,
  • Securities -- United States.,
  • Stock index futures -- United States.

  • Edition Notes

    SeriesTestimony -- T-GGD-88-8.
    ContributionsUnited States. General Accounting Office.
    The Physical Object
    Pagination5 leaves ;
    ID Numbers
    Open LibraryOL17834981M

    You have the move to The crash was preceded by significant drops in the prior week. He had expected a drop in the value of the dollar due to an international tiff with the other G7 nations over the dollar's value, but the seemingly worldwide financial meltdown came as an unpleasant surprise that Monday. The very image of trading had been changed within the financial community.

    As William Simon, the former Secretary of the Treasury, noted, when he first entered investment banking, "trading was not a respectable profession. He closes with the Cassandra-like note that instead of trying to control the astonishingly high levels of trading in short periods of time which was a major cause of Black Monday, the NYSE with the guidance and support of the Security Exchange Commission SEC increased the capacity for trading. Moreover, these firms had been using property as collateral for their increased borrowing. Manufacturing output is up.

    The frantic selling activated yet another round of stop-loss orders, which dragged markets into a downward spiral. Murray, Alan. But as the market crash evidenced, trading had taken on a life of its own. For example, Nobel-prize winning economist Robert J. It was like the Wild West out there. While there are many theories that attempt to explain why the crash occurred, most agree that mass panic caused the crash to escalate.


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Preliminary observations on the market crash of October 1987 by Richard L. Fogel Download PDF Ebook

To be alerted when the Indicator turns Green again, subscribe now to Instant Alerts! Investors who used the crash as a buying opportunity took full advantage of those recoveries, Rotblut said. We'll probably never know for sure.

The October 19, 1987 Market Crash

Compare Accounts. Key Takeaways Black Monday refers to the stock market crash that occurred on Oct. The frantic selling activated yet another round of stop-loss orders, which dragged markets into a downward spiral.

Metz earned his bachelor's and master's degrees in Journalism at Marquette University in andrespectively. Why or why not?

Endnotes 1 Black Monday is the name commonly given to October 19, The role of media as an amplifying factor for these developments has also come in for criticism. We were fortunate this occurred when the American economy is very stong. Timeline compiled by the Federal Reserve In late and earlythe United States economy shifted from a rapid recovery from the early s recession to a slower expansion, resulting in a brief " soft landing " period as the economy slowed and inflation dropped.

Whatever it was, it saved the day. Coincidentally, since the SEC was unable to prevent shady IPOs and conglomerates from proliferating, it begun conducting numerous investigations of illegal insider trading in early The general belief on Wall Street was that it would prevent a significant loss of capital if the market were to crash.

The 1987 Market Crash

According to Shiller, the most common responses were related to a general mindset of investors at the time: a "gut feeling" of an impending crash, perhaps brought on by "too much indebtedness".

In your opinion, will the demonstrations across the country bring positive change? The models recommended even further sales. Prices recovered. The long-term crippling consequences that Wall Street's top leaders and high government officials Preliminary observations on the market crash of October 1987 book the worse were avoided by a combination of enlightened quick remedies, lowering of fears, expertise and professionalism among numerous individuals in positions high and low, and opportunism among many who saw new opportunities in the havoc.

This had harmful effects: it added to the atmosphere of uncertainty and confusion at a time when investor confidence was sorely needed; it discouraged investors from "leaning against the wind" and buying stocks, since the discount in the futures market logically implied that investors could wait and purchase stocks at an even lower price; and it encouraged portfolio insurance investors to sell in the stock market, putting further downward pressure on stock prices.

After the crash, exchanges implemented circuit breaker rules and other precautions to slow down the impact of irregularities in hopes that markets will have more time to correct similar problems in the future.

The comments of notables of the day are instructive for putting the confusion and crash into some context.Oct 16,  · So, that's why the stock market crashed on Oct. 19, It was a "perfect storm." You had leveraged risk arbitrage investors who were "forced" to sell to meet margin calls.

You had mutual fund Author: Matt Maley.

Portfolio insurance

O.R. Applications Contagion around the October stock market crash Jian Yang a, David A. Bessler b,* a Department of Accounting, Finance and MIS, Prairie View A&M University, TXUSA b Blocker Building, Texas A&M University, College Station, TXUSA Received 3 November ; accepted 27 April Available online 26 July Black Monday, Oct.

19,was a day when the Dow Jones Industrial Average fell by 22% and marked the start of a global stock market decline.Oct 19,  · In the two pdf sessions on Oct. 19 and Oct. 20,Nike shares fell to 94 cents from $, a total decline of 26%. The stock recovered to pre-crash levels by late Januaryand Twenty years after the crash ofthe market is at or near a record high.

Such was also the case in on the the year anniversary of the crash. Here's how CNBC saw it then.Oct 19,  · Market crash of Ebook carefully and see if you can find any similarities with what might most probably next to come!

Oh boy!