Quick Scans: BLACK MONDAY
In this chronicle of financial chaos, Tim Metz uses his 21 years' experience with The Wall Street Journal to try to determine what really happened on that crazy day in 1987, three years ago.
The Dow Jones Industrial Average (DJIA) had been making new records until August of that year, despite the index surpassing all rational notions of value. Interest rates had been rising since spring, trashing the bond market. Leveraged buyouts, risk arbitrage and wild updays triggered by program trading added excitement to an already volatile market. The bull market was news, headlining the national magazines. The public was heavily invested and, of course, long.