{"id":39373,"date":"2018-10-19T07:33:54","date_gmt":"2018-10-19T12:33:54","guid":{"rendered":"http:\/\/olduvai.ca\/?p=39373"},"modified":"2018-10-19T07:33:54","modified_gmt":"2018-10-19T12:33:54","slug":"stock-market-crash-of-1987","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=39373","title":{"rendered":"Stock Market Crash of 1987"},"content":{"rendered":"<header class=\"row essay-header\">\n<div class=\"large-15 component\">\n<div class=\"essay-header-container\">\n<h3><a href=\"https:\/\/www.federalreservehistory.org\/essays\/stock_market_crash_of_1987?platform=hootsuite\">Stock Market Crash of 1987<\/a><\/h3>\n<p>The first contemporary global financial crisis unfolded on October 19, 1987, a day known as \u201cBlack Monday\u201d when the Dow Jones Industrial Average dropped 22.6 percent.<\/p>\n<div class=\"image-container clearfix no-print\">\n<div class=\"image-wrapper vertical\"><a title=\"American newspaper headlines describing the stock market plunge of October 19, 1987\"><img decoding=\"async\" class=\"no-print\" title=\"American newspaper headlines describing the stock market plunge of October 19, 1987\" src=\"https:\/\/www.federalreservehistory.org\/-\/media\/images\/essays\/great_moderation\/crash_of_1987.jpg\" alt=\"American newspaper headlines describing the stock market plunge of October 19, 1987\" \/><\/a><\/div>\n<p><span class=\"caption\">Composite of newspaper headlines reporting the Stock Market Crash of 1987 (Associated Press)<\/span><\/div>\n<hr \/>\n<\/div>\n<\/div>\n<\/header>\n<aside class=\"row relatedcontent-component right-aligned\">\n<div class=\"large-15 component\">\n<p>The first contemporary global financial crisis unfolded in the autumn of 1987 on a day known infamously as \u201cBlack Monday.\u201d<a href=\"https:\/\/www.federalreservehistory.org\/essays\/stock_market_crash_of_1987?platform=hootsuite#footnote1\"><sup>1<\/sup><\/a>\u00a0 A chain reaction of market distress sent global stock exchanges plummeting in a matter of hours. In the United States, the Dow Jones Industrial Average (DJIA) dropped 22.6 percent in a single trading session, a loss that remains the largest one-day stock market decline in history.<a href=\"https:\/\/www.federalreservehistory.org\/essays\/stock_market_crash_of_1987?platform=hootsuite#footnote2\"><sup>2<\/sup><\/a>\u00a0 At the time, it also marked the sharpest market downturn in the United States since the <a href=\"https:\/\/www.federalreservehistory.org\/essays\/great_depression\">Great Depression<\/a>.<\/p>\n<p>The Black Monday events served to underscore the concept of \u201cglobalization,\u201d which was still quite new at the time, by demonstrating the unprecedented extent to which financial markets worldwide had become intertwined and technologically interconnected. Black Monday led to a number of noteworthy reforms, including exchanges developing provisions to pause trading temporarily in the event of rapid market sell-offs. In addition, the Federal Reserve\u2019s response set a precedent for the central bank\u2019s use of \u201cliquidity\u201d to stem financial crises.<a href=\"https:\/\/www.federalreservehistory.org\/essays\/stock_market_crash_of_1987?platform=hootsuite#footnote3\"><sup>3<\/sup><\/a><\/p>\n<h4 id=\"events\">Events Leading Up to the Crash<\/h4>\n<p>Stock markets raced upward during the first half of 1987. By late August, the DJIA had gained 44 percent in a matter of seven months, stoking concerns of an asset bubble.<a href=\"https:\/\/www.federalreservehistory.org\/essays\/stock_market_crash_of_1987?platform=hootsuite#footnote4\"><sup>4<\/sup><\/a>\u00a0 In mid-October, a storm cloud of news reports undermined investor confidence and led to additional volatility in markets. The federal government disclosed a larger-than-expected trade deficit and the dollar fell in value. The markets began to unravel, foreshadowing the record losses that would develop a week later. Beginning on October 14, a number of markets began incurring large daily losses.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/aside>\n","protected":false},"excerpt":{"rendered":"<p>Stock Market Crash of 1987 The first contemporary global financial crisis unfolded on October 19, 1987, a day known as \u201cBlack Monday\u201d when the Dow Jones Industrial Average dropped 22.6 percent. Composite of newspaper headlines reporting the Stock Market Crash of 1987 (Associated Press) The first contemporary global financial crisis unfolded in the autumn of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[13166,8405,9257,22418,7551,22420,2240,22419,2731],"class_list":["post-39373","post","type-post","status-publish","format-standard","hentry","category-economics","tag-13166","tag-black-monday","tag-djia","tag-donald-bernhardt","tag-dow-jones-industrial-average","tag-federal-reserve-bank-of-chicago","tag-global-financial-crisis","tag-marshall-eckblad","tag-stock-market-crash"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39373"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39373\/revisions"}],"predecessor-version":[{"id":39374,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39373\/revisions\/39374"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}