The first global financial crisis erupted in the autumn of 1987 on a day known as “Black Monday.” A chain reaction of market distress sent stock exchanges around the world plummeting in a matter of hours. In the United States, the Dow Jones Industrial Average dropped 22.6 percent in a single trading session, a loss that remains the largest one-day stock market decline in history. At the time, it marked the sharpest market downturn in the United States since the Great Depression.
In today’s video we look at the causes of the 1987 crash, discuss program trading and portfolio insurance and how the crash forever changes stock markets around the world.
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‘’Courage taught me no matter how bad a crisis gets … any sound investment will eventually pay off."
Well done except for one item. Greenspan became Fed Chairman in Feb. He raised int rates to show his Bona fides. Mortgage rates went up from 7% to 10%. This created a large gap in bond vs stock prices and reversion to a more normal ratio had to occur. slowly or quickly.
Stocks resumed their upward moves and interest rates dropped thus showing Greenspan had overshot the purpose, of showing a post Volker world he was Macho enough.The Divergence became Convergence in one day.
“So how much was the market down in ‘87? Well it wasn’t down, it grew 2%.”
stonks always win
Love Paul Tudors voice at 14:10
I love the Robert Downey Junior look alike floor trader in the crash clips
Does anyone know what Taleb actually bet on and how his record was before his big break?
the violation of Taleb at the end of the video was so outta pocket but I'm all for it!! 🤣🤣🤣
I didn't know all this about the 87 crash (I was a whopping 1 year old at the time) and always thought it had to do with the S&L crisis that was going on around the same time. I never bothered to look into it to this detail because in my mind it was straightforward: in 2008 banks were in trouble and stocks crashed, in 1987 Savings and Loans were in trouble so… stocks crashed.
Didn’t realized Robert Downey Jr was a trader during the crash.
Just imagine retiring as a registered nurse, using all your income/salary to pay rent and tax without any good investment or means of extra cash, tending to leave your profession/job that has been part of you for many years with no good funds. How will you cope?
After the crash I decided to buy my first equities (IBM and DEC). I was 15.
Why do we have to bring up that asshole — George Soros? The guy is personally responsible for all the world's current chaos! ASSHOLE!!!!
Another exceptional look at market history by Mr. Boyle. I’ll never forget that day in 1987. I leaned about greed, fear, and irrationality, and those lessons have guided me ever since.
People must never fear market crashes because short sellers are profiting/winning during these times. So winning in the markets is knowing whether to go long or short in an asset and entering and exiting the trade correctly. That's it. 😎😎😎
Fascinating stuff this
Was that RDJ at 5:36? Lol
When does something become a self fulfilling prophecy?
But why did Japan market fell even when world markets rose?
Literally buy high sell low.
I guess r/wallstreetbets isn't anything new.
There is alot of Fake news out there. Peoples 401k retirement plans are tired or invested with the market without there knowledge, when the market sinks, peoples retirement will sink at the same time, I would get my 401k out and put it in a index fund, much safer. ACT quickly before the market crashes
5:36 where did Tony stark came from
That subtle jab at Nicholas Taleb though lol
I remember the autumn of 87, here where I live the economy was booming and everyone got jobs anywhere, people was speculate on the stock market and buying real estate like crazy, everyone was doing it, (except me) I had began to school, and one day I was told one of my colleagues had committed suicide, I was shocked and did not understand, later in the autumn people started loosing money on their investment in real estate, my ex-brother in law had invested the families savings in real estate and lost ~50% and got divorced a little later, and next year, in the winter our teachers told us some earlier students had difficulties in getting jobs, and we did not belive our ears, even average students had usually had job offers in the envelope with their papers from school when they finished, when I finished in 89 there was not one single job anywhere, actually I was the only one getting a proper job, I think almost the whole country learned a harsh lesson from that crash
Narrowing Trade deficit, Ah the good ole days. 2022 1000 point drop, no big deal up 500 point after10:30 close the day up 67 points.
So it had practically nothing to do with the economy and had to do with pure speculation of leveraged buyouts expectations exacerbated by mechanics of the system
Beneath all the institutional pomp and authority, this is all so silly.
Thank you, Please make a video about AMC/APE
Amazing as always. Thank you for the video.
RJ Downey Myster y Solved . this is great
https://www.youtube.com/watch?v=Dtc58sTsTpE
Thanks for the info hitman! Blending in well
What we have now, is much worst than 1987.
The Crash of 87
helloooo everybody it's markiplier
The points that soros and talib make basically implies that markets can’t be modeled. And therefore prices can’t be predicted. So why do they have hedge funds? To punt?
We just snorted everything. Oops, I meant shorted.
Nothing happened to the economy.
Black Monday occurred on the first trading day after the Great Storm of 1987 that hit the UK and France on 15th and 16th October. It was weather that steered animal trading instincts.
wait portfolio insurance just sounds like you buy high and then sell low but on a computer
26:31 savage
Please could we have more Rap news
15:47 That… Sounds so incredibly obvious. Isn't it? I guess it isn't. Why, though? Is it because traders are often thought of as inhuman or so highly trained as to not act like every other human in existence?
Two phone guy! Bravo!
Who else here was born in 87? 🤘
I would be interested in your view that Wall Street and Main Street are disconnected. It seems that Wall Street is scared of its own shadow yet businesses keep growing and need employees.
Investing in crypto now should be in every wise individual's list, I'm so happy l have been earning $60,000 return from my $7,000 investment every 14days of trading. Thanks Mrs Lucy
Can we draw some similarities between the bill that reached the floor just before Black Monday regarding taxing acquisition-related borrowing and the recently passed bills regarding a 15% minimum corporate taxation and the large addition of funding to the IRS?
Is it fair to compare the economic reports that preceded Black Monday (trade deficit, "high" PE) and the reports we are seeing now (record debt, widening credit spreads, structural inflation)?
Was that a sarcastic jab at NN Taleb at the end?