Black Monday 1987 - 500 Beiträge pro Seite

[nachtschatten]

vorab: ein rutsch wie 1987 ist heute defacto ausgeschlossen, da über institutionalisierte handelsaussetzungen dem schlimmsten vorgebeugt werden kann (siehe die aktuellen regeln für handelsunterbrechungen http://www.nyse.com/press/circuit_breakers.html, wie gut dieses system funtioniert, konnten wir ja im mai sehen, als es an der NYSE nach dem 180-punktefall zu einer teilweisen unterbrechung des handels kann, siehe http://www.fool.com/News/mft/2006/mft06052218.htm?ref=foolwa….

ich gehe ehrlich gesagt nicht von einem crash in nächster zeit aus, aber nichtsdestotrotz gibts schon einige orginelle parallelen im vorspiel des 87iger crashs und der aktuellen entwicklung - soft landing, dollarverfall, alltimehigh, inflationsdruck, merger mania: kommt uns doch allen irgendwie bekannt vor, oder?




Black Monday- the Stock Market Crash of 1987
The stock market crash of 1987 was the largest one day stock market crash in history. The Dow lost 22.6% of its value or $500 billion dollars on October 19 th 1987! In order to understand the crash, we must first study the cause.

1986 and 1987 were banner years for the stock market. These years were an extension of an extremely powerful bull market that started in the summer of 1982. This bull market had been fueled by hostile takeovers, leveraged buyouts and merger mania. Companies were scrambling to raise capital to buy each other out, in essence. The philosophy of the time was that companies would grow exponentially simply by constantly purchasing other companies. In leveraged buyouts, a company would raise massive amounts of capital by selling junk bonds to the public. Junk bonds are simply bonds that have a high risk of loss, so they pay a high interest rate. The money raised by selling junk bonds, would go towards the purchase of the desired company. IPOs were also becoming a commonplace driver of the markets. An IPO is when a company issues stock for the first time. “Microcomputers” were also a top growth industry. People started to view the personal computer as a revolutionary tool that will change our way of life, and create wonderful profit opportunities. The investing public was caught up in a contagious euphoria, similar to that of any other bubble and market crash in history. This euphoria made people, once again, believe that the market would always go up.

Despite the strong economic growth, SEC was unable to prevent shady IPOs and conglomerates from proliferating. In early 1987, the SEC conducted numerous investigations of illegal insider trading. This created a wary stance from many investors at this point. Also, due to the extremely strong economic growth, inflation was now becoming a concern. The Fed rapidly raised short term interest rates to temper inflation. This, unfortunately, had an effect of hurting stocks as well. Many institutional trading firms started utilizing portfolio insurance to protect against further stock dips. Portfolio insurance is a practice that uses futures contracts as an insurance policy. People that hold the futures contracts can make money as the market crashes, offsetting the losses in the stock holdings. After interest rates had risen, many of the large institutional firms started using portfolio insurance all at the same time. The futures market was taking in billions of dollars within minutes, causing the futures market and the stock market to crash from instability. Additionally, common stock holders all wanted to sell simultaneously. The market couldn’t handle so many orders at once and most people couldn’t sell because there weren’t ANY buyers left!

Within one day, 500 billion dollars was evaporated from the Dow Jones index. Markets in every country around the world collapsed in the same fashion. When individual investors heard that a massive stock market crash was in effect, they scrambled to call their brokers. This was unsuccessful because each broker had many clients. Many people lost millions instantly. Some unstable individuals, who had lost fortunes, went to their broker’s office and started shooting. Several brokers were killed, despite the fact that they had no control over the market action. The majority of investors who were selling, didn’t even know why they were selling, except that they “saw everyone else selling”. This irrational mentality caused the extreme market crash. Most futures and stock exchanges were shut down for the day.

Around this time, the Fed started to intervene. Short term interest rates were instantly lowered to prevent a depression and a banking crisis. Remarkably, the markets recovered quickly from the worst one day stock market crash. Unlike the stock market crash of 1929, the market quickly started on a bull run, once again. This was powered by companies buying back their stocks that were undervalued after the severe crash. Additionally, the Japanese Nikkei index was embarking on its own massive bull market. This tremendous momentum helped pull the US stock markets to new heights never seen before. Some benefits came as a result of the 1987 stock market crash. For example, the circuit breakers system was implemented, which electronically stops stocks from trading if they plummet too quickly. This will prevent any future one day vertical drops, like 1987.

Once again, the remarkable similarity between all of the market crashes is striking. It seems that after all of the historical market crashes, people would learn to foresee a coming financial disaster. This rarely happens, of course, which is why there is constant opportunity for the smart money to prosper from the irrationality of other people.

http://www.stock-market-crash.net/1987.htm





Black Monday is the name given to Monday, October 19, 1987, when the Dow Jones Industrial Average (DJIA) fell 22.6%. The Black Monday one-day decline was not confined to the United States but was mirrored all over the world. By the end of October, stock markets in Australia had fallen 41.8%, Canada 22.5%, Hong Kong 45.8%, and the United Kingdom 26.4%.

(The terms Black Monday and Black Tuesday are also applied to October 28 and 29, 1929, which occurred after Black Thursday on October 24, which started the Stock Market Crash of 1929.)

The Black Monday decline was the second largest one-day percentage decline in stock market history. The largest one occurred on Saturday, December 12, 1914, when the DJIA fell 24.39%. However, in this case, the New York market had been closed since July due to the outbreak of WW I. The greatest point loss in DJIA history was on Monday, September 17, 2001, 684.81 points.

A certain degree of mystery is associated with the 1987 crash. Many have noted that no major news or events occurred prior to the Monday of the crash, the decline seeming to have come from nowhere. Important assumptions concerning human rationality, the efficient market hypothesis, and economic equilibrium were brought into question by the event. Debate as to the cause of the crash still continues many years after the event, no firm conclusions having been reached.

In the wake of the crash, markets around the world were put on restricted trading primarily because sorting out the orders that had come in was beyond the computer technology of the time. This also gave the Federal Reserve and other central banks time to pump liquidity into the system to prevent a further downdraft. While pessimism reigned, the market bottomed, leading some to label Black Monday a "selling climax", where the excess value was squeezed out of the system.
Causes
In 1986, the United States economy began shifting from a rapidly growing recovery to a slower growing expansion, which resulted in a "soft landing" as the economy slowed and inflation dropped. As 1987 wore on, it seemed that recessionary fears were not warranted and that boom times would continue. The stock market advanced significantly, peaking in August 1987. There were a series of volatile days that caused widespread nervousness leading up to the crash, with the market ultimately sliding downward. In late August some observers warned that technical analysis indicated the market was now in a cyclical "bear" mode. However, this view was not widely subscribed to even as the market traded wildly.

Potential causes for the decline include program trading, overvaluation, illiquidity, and market psychology. These theories might explain why the crash occurred on October 19 and not some other day, why it fell so far and fast, and why it was international in nature and not unique to American markets.

The most popular explanation for the 1987 crash was selling by program traders. Program trading is the use of computers to engage in arbitrage and portfolio insurance strategies. Through the 1970s and early 1980s, computers were becoming more important on Wall Street. They allowed instantaneous execution of orders to buy or sell large batches of stocks and futures. After the crash, many blamed program trading strategies for blindly selling stocks as markets fell, exacerbating the decline. Some economists theorized the speculative boom leading up to October was caused by program trading, while others argued that the crash was a return to normalcy. Either way, program trading ended up taking the majority of the blame in the public eye for the 1987 stock market crash.

Economist Richard Roll believes that the international nature of the stock market decline contradicts the argument that program trading was to blame. Program trading strategies were used primarily in the United States, Roll writes. If program trading caused the decline, why would markets where program trading was not prevalent such as Australia and Hong Kong have declined, as well? Although these markets might have been reacting to excessive program trading in the United States, Roll points to observations that would indicate otherwise. The crash began on October 19 in Hong Kong, spread west to Europe, and hit the United States only after Hong Kong and other markets had already declined by a significant margin.

Another common theory states that the crash was a result of a dispute in monetary policy between the G-7 industrialized nations, in which the United States, wanting to prop up the dollar and restrict inflation, tightened policy faster than the Europeans. The crash, in this view, was caused when the dollar-backed Hong Kong stock exchange collapsed, and this caused a crisis in confidence.Jude Wanniski stated that the crash happened because of the breakup of the Louvre Accord, a monetary pact between the US, Japan, and Germany to keep currencies stable. Just prior to the crash, Alan Greenspan had said that the dollar would be devalued.

Another theory is that the Great Storm of 1987, which happened on the Friday before the crash, helped contribute to it. In 1987 there was no Internet trading, and brokers had to physically get to work in the City of London in order to do their deals. On Friday, October 16, many routes into London were closed and consequently many traders were unable to reach their offices in order to close their positions at the end of the week. This made many people nervous on both sides of the Atlantic and there were certainly some traders who believed at the time that this acted as the trigger for the panic selling which took place on Black Monday. Panic selling in London and New York, the biggest stock markets in the world, then affected other markets around the world, creating a global stock market crash.

Yet another theory for the 1987 crash was the random placement of sell orders in a sufficiently small time interval as to cause a sudden decline in the indices, leading to a cascade effect of further sell orders. In the days preceding the actual Black Monday crash the markets began to sell off, beginning with a sudden 5% selloff on Wednesday, three days before the actual crash. Prior to that Wednesday, the trend for the Nasdaq/DJIA was stable, and undergoing what could be interpreted as a normal correction. If one were to zoom in on Wednesday one would notice normal trading activity and then an abrupt 1% intra-day drop. This drop could have been triggered by randomly placed sell orders that happened to all trigger at once. Althoug the odds of this happening are very slim, there is a probability that sufficient random sell orders placed by institutions, insiders, and the like will trigger a cascade effect should enough sell orders be placed in a small enough time interval.

The initial small 1% selloff caused by the 'clumped' random sell orders may have prompted trend traders to liquidate their positions, resulting in a larger decine that simply fed on itself like a domino effect, ultimately leading to the 26% crash of Black Monday.

http://experts.about.com/e/b/bl/black_monday_(1987).htm

[big_mac]

Damals ist es schon die Tage davor ordentlich bergab gegangen, und am Wochenende konnte man in den Nachrichten hören daß es montags krachen wird, weil noch so viele Verkaufsorder am Freitag offen geblieben sind.

Am Montag kam dann tatsächlich die Panik, und die verrückten Computer - und London war wegen Sturm geschlossen.

[Panem]

Zudem wissen heute alle Beteiligten, dass der Dollar das Papier nicht mehr Wert ist, auf das er gedruckt wird.

Das war 1987 ganz anders.

[jeffery2]

Ich lese den in Englisch geschriebenen Artikel nur oberflächlich und lese ständig..Random.....also alles Zufall, unglückliche Umstände usw.
Wenn Greenspan damals nicht so massiv reingehauen hätte....
PPT gibt es nicht?
Der Dow ist in den 90ern an einem Tage 400 Punkte abgeschmiert und anschliessend im Plus geschlossen.
Schaut Euch mal den Kursverlauf vom Freitag an.
Der Krampf wird nicht ewig funktionieren, davor muss man Angst haben. Man kann das Ekelfleisch öfter mal mit neuem Datum versehen, aber irgendwann kotzt der Abgebrühteste.
J2

[big_mac]

Antwort auf Beitrag Nr.: 25.912.124 von Panem am 03.12.06 20:39:08

das war 87 genau gleich, wenn nicht schlimmer.

[goodbuy2003]

Hi
Ihr solltet einmal im Jahr in die Schweiz fahren und Schnitzel mit Pommes essen, wenn möglich im selben Restaurant, dann schneidet der EUR auch nicht so besonders ab. EUR und Dollar sind beide im Apfelstrudel.

[nachtschatten]

guten morgen das orginelle an der geschichte 1987 war wohl wirklich, dass es ohne einen spezifischen anlass passiert ist - mal abgesehen vom londoner wetter - anders als zb 98, als LTCM über die klinge gesprungen ist. ich bin gespannt, wie lange der spass noch weitergeht - solange die jungs auf CNBC weiterhin bei jeder noch so mässigen nachrricht mit schweiss auf stirn verkünden oh yeah this is really good news for the market blablabla gibts wohl keinen anlass zur sorge - auch wenn pfizer dem DOW heute sicher keinen ständer verpassen wird.

[big_mac]

Antwort auf Beitrag Nr.: 25.920.000 von nachtschatten am 04.12.06 10:02:23

Der Dollar und die Zinsen waren auch 87 das Thema.

[nachtschatten]

Antwort auf Beitrag Nr.: 25.922.031 von big_mac am 04.12.06 11:38:34

ja, ähnlich wie derzeit - aber was ist letztendlich ausschlaggebend für eine derartige reaktion, die ja mehr oder weniger aus heiterem himmel zu kommen scheint?

hier mal der wochenchart zu '87:




quelle: http://www.lowrisk.com/crash/crashcharts.htm

[Panem]

Antwort auf Beitrag Nr.: 25.924.789 von nachtschatten am 04.12.06 14:03:02

Das weiß ich noch sehr genau:

Ausschlaggebend war eine Aussage der Fed zur DM:

"Wir werden der Bundesbank die Dollars vor die Füße werfen."

Bums, Klappe zu.

[big_mac]

Antwort auf Beitrag Nr.: 25.924.812 von Panem am 04.12.06 14:04:36

so ist es.
Ein Politiker -Finanzminister wenn mich mein Gedächtnis nicht täuscht-, der blöd quatscht, und Rummms.

[Panem]

Antwort auf Beitrag Nr.: 25.926.353 von big_mac am 04.12.06 15:16:34

Das ist in der Tat ein lupenreines Zitat (Nachzulesen z.B. in Kostolanys: "Die Kunst über Geld nachzudenken") Es war Herr Grünspan persönlich, der bei einem Interview sagte, dass er bei NIchteinlenken der restriktiven Geldpolitik der Deutschen Bundesbank ihnen "die Dollras vor die Füße werfen" würde.

Kein Crash lässt sich aus einem Chartverlauf heraus interpretieren.

Charts spiegeln lediglich die Psychologie wieder.