Article: The Hunt for Black October

Sep 12, 2007: 10:08 PM CST

dow-crash.jpgI recently came across the following deep and interesting link on StockBee‘s site, in reference to an article by Matthew Rees entitled “The Hunt for Black October.”

Author Rees discusses various perspectives from the events leading to the major 20% decline in the Dow Jones Average on “Black Monday,” October 19, 1987 and includes many lesser-known facts about that dismal day on Wall Street.

The article is an interesting read because some analysts muse that the current market resembles some of the characteristics that preceded that tumultuous fall, including comments by former Federal Reserve Chair Alan Greenspan (made September 6th, 2007 as reported at CBS News).

Is the Economy heading towards Recession and is the current environment like that of 1987? I weigh in on the side that says ‘no’ but I always encourage independent thinking and careful critical research on your own.

I highly recommend you read the article and learn from the author’s perspective, and learn his Seven Possible Reasons for why “Black Monday” occurred, and then analyze his “Best Explanation” as to why Rees thinks the events happened.

It is interesting to note that no major terrorist attack, no enormous disruption, and no major singular event was the cause of the market decline, but that it was almost a ‘Perfect Storm’ that was set in motion and culminated in eerie harmony, leading to the market’s cascade.

Think and see for yourself and try to draw possible parallels to the current market action and environment. Are we forming a current “Perfect Storm” that only begins with the “Credit Crunch” and Housing Market Decline?

Time will tell. Be safe!

9 Comments

9 Responses to “Article: The Hunt for Black October”

  1. Glyn Says:

    Hi Corey,

    Thx for the views re IBM, AMZN, BBY. Great article by the way. I was living in the UK at the time and remember the freak storm (they never did officially call it a hurricane)all to well. The evening before the BBC weather man had pointed out the storm off the coast of Portugal but stated we had nthing to woory about. Early hours of the morning (2am) it hit SE England and promptly blew down several thousand trees, knocked over trucks closing freeways, bringing house down – clearly a freak strom, cleary a hurricane, clealry a cock-up by the weatherman – and then the following week black Thursday – wow what a time. And all this at a time when Thatcher and the London financial community were riding high, a period of huge growth, big housing gains even bigger city salaries – I guess having lived thorugh that bust, subsequent housing bust, dot.com bust I’m pretty darn sure we’ve another on the horizon.

  2. Glyn Says:

    Why Black Thursday:
    Oct 22 1987: Piggott sent to jail for three years
    Former champion jockey, Lester Piggott, has been sentenced to three years imprsionment after being found guilty of an alleged tax fraud of over £3m.

    He was a ‘national treasure’ and had the previous week met the Queen (knighthood I think), indeed rode many of her horses – for many this icon falling through greed plus the excesses of the city high earners was something of a turning point for many in the UK –

    PS the Monday of that week was pretty s****y also.

  3. Corey Rosenbloom Says:

    Glyn,

    Thank you so much for sharing personal insights and experiences. I love to hear about major news events from the perspective of people who witnessed them – such perspectives either are glossed over in the major news outlets or not reported at all. I find it fascinating – even small details.

    I actually never knew about the London hurricane, or that Greenspan was out of the country on that fateful day. There is so much to learn about that major life-changing and market-changing event.

    I would hope that structures are in place to prevent another such catastrophe from occurring, but one can never be sure. Many traders and bloggers discuss the existence of a mysterious “Plunge Protection Team” which steps in the moments markets get too rocky. I don’t know but it’s an interesting concept.

    I’d be happy to hear any other experiences or accounts of this day or any other major market event day, including the week after September 11th, or specific experiences through the nasty .com plunge.

    Corey

  4. OrrjdlkLauren Says:

    I just bookmarked this for my future referance.

    Have a nice day
    mark
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  5. BriggsHorn7875 Says:

    my inernet not working properly I have bookmarked ur story i'll read it latter

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