The 1987 Event was far worse than yesterdays tumble

globeandmail.com: $60-billion gone in a New York minute — You should note that this event was like a minor earthqauke. The experts stood back and said, “Well, at least it wasn’t the big one.” Knowing that the big one will eventually come because it always does. Needless to say they need to beef things up.

You know the market is taking a serious tumble when the world’s biggest stock exchange and benchmark stock index can’t keep up with the selling.

The New York Stock Exchange set volume records Tuesday as China-fuelled fears of an economic slowdown triggered a massive retreat, including a gut-wrenching, one-minute afternoon swoon that lopped $60-billion off the market capitalization of the 30 blue-chip companies in the Dow Jones industrial average.

The Dow finished down 416.02 points in its worst one-day decline since 2001. The selloff chopped $600-billion (U.S.) from the value of American companies. As more than 2.3 billion shares changed hands, computer systems overloaded at both the exchange and the firms that track trading. The worst moment came just before 3 p.m., when the Dow fell 178 points in less than 60 seconds.



  1. Joel Housman says:

    John,
    I do not know if this is correct but I read somewhere earlier today on one of the finance articles that the sharp decline of 160 points was just the computers catching up to the trades that had already happened. In other words, if the computers had been fast enough to keep up with all of the trades, the sell offs would have been steady over the entire day and not the sharp drop that happened during the afternoon. I could have read it wrong but that is what I got out of one of the articles.

    Joel Housman

  2. stew says:

    Wonder how that will affect mine and a lot of others pension plans. Evan those of us fortunate enough to have a traditional plan can come up short if this keeps up.

  3. Andy says:

    Unless your selling your stock your not loosing any money.

  4. tallwookie says:

    Fortunately, we’re not using abacuss’s (abacussii? plural) anymore, or somone would have a HELL of a headache.

  5. ECA says:

    YEA, the end is near…..

  6. MikeN says:

    How can they say this money is gone? Every sale, people got money.

  7. TJGeezer says:

    A billion bucks a second – even if it was just playing catch-up, that was one hella fast elevator ride.

    Well, the administration has been trashing to dollar for years now. All China has to do is pull the plug on all the U.S. debt it holds and the US will left standing there with worthless currency and no manufacturing capacity left to speak of. Naturally the real pain would as always be felt mainly by the middle class and below.

    I’m with #6 on this – doesn’t matter if those skeptical of neocon policies predicted this kind of thing. Someone at the national level needs to apply some wisdom now or we could all be in trouble.

  8. Dallas says:

    Wow. That means Bush flushed only 10 minutes worth of tax dollars in his private war with Iraq. That doesn’t sound like a lot of money any more.

  9. We could fund a war with that kind of mola.

    Its good that the market corrected. This was not a bad dip.

    I was a broker during the crash of 1987 and it wasn’t until the next day did we know the exact number the dow dropped.

    Today the market has safe guards to prevent large drops. The exchange stops trading.

    The floor of the new York stock exchange uses tickets so it takes longer to settle all the transactions over the nasdaq which is real time
    I doubt the computers over heated at the nasdaq however i’m sure they got warm.

  10. MikeN says:

    How can China ‘pull its debt’. They bought bondfs, and those pay the defined interest rate. Presumably they are buying the bonds because they think its a worthwhile investment, a better deal than investing with the local commies who might seize the money on a whim.

  11. #1 — I have not gotten a straight story on this. BUT the system is designed to prevent this sort of thing. It didn’t work.

    With bonds you sell the bonds and depress the value of the bonds making them a bargain. I think there is more than bonds in this deal with China.

  12. etn says:

    frustrated with the market!? let it all out here!

    lord knows i am!

  13. Tom 2 says:

    You should make a new segment, why and how the stock market might completely implode.

  14. Wayne Bienek says:

    The market?! Ha.. Go to VEGAS! Then you can see if you make or lose money in a few seconds instead of wasting days for the trouble. People who buy stock not knowing what the company does or how the business model works/makes money are doing nothing more than gambling. So why not do it quicker! 🙂

    Now the above comments do not apply to Mutuals and many long term investments.. Im refering to people who intend on holding for only a year or two.


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