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19 October 2008

On this day in history: Black Monday, 1987

On Monday, 19th October, 1987, the world economy was rocked by a series of stock market crashes. The economic meltdown began when the Hong Kong stock exchange opened and share values began to plummet. As the other exchanges opened around the world they all suffered the same fate, resulting in the largest ever percentage decline in share values in a single day, which quickly became known as 'Black Monday'.

Over the previous year, the rapid economic growth of the mid-1980s began to slow culminating in small falls in the value of shares over the week before the crash. By the end of the month stock markets around the world were counting the cost of the meltdown: the Dow Jones Industrial Average in the United States fell by 23%; shares on the Financial Times Stock Exchange Index in the UK lost 26% of their value; the Spanish stock market saw a 31% decline; in Australia the collapse was 42%; the Hong Kong market suffered a loss of 46%; the New Zealand stock market was particularly badly by the crash that wiped away 60% of the value of shares.

To learn more see Mark Carlson's report "A Brief History of the 1987 Stock Market Crash with a Discussion of the Federal Reserve Response," (2007), a pdf file produced by the U.S. Federal Reserve.


Free Music said...

nice blog indeed

GeneratedMadness said...

Hopefully in 10 years you are not posting about the depression of 2008-2009.

Stepterix said...

fm: thanks for the kind words

gm: yep, the parallels were not lost on me; although, this crash does put the current downturn into perspective