I still say it was caused by comic books. Really cool comic books. Everyone cashed out their stock holdings to buy copies of Batman: Year One, Dark Knight Returns, Watchmen, the McFarlane run of Amazing Spiderman, etc etc.

I'm trying to remember: the stock boom of the 80s was fueled by real estate, yes?

Maybe it's me, but it felt that back in the 80s stock prices seemed more tangible (maybe?) than they are today. Maybe it's because we actually manufactured stuff.

/Of course, I don't remember the 80s be a particularly good economic time, but that's to be expected given half the people I knew got laid off from the mills.

sigdiamond2000: I am SO glad I cashed out my 401K early and put everything into gold. I'll never have to worry about these crazy market fluctuations again.

Mmmmm that's good satire.

That was a crazy farking four days. I was working at a large, wholesale bank on a contract and all we could do was watch the Quotron.

If you had money when the dust settled, you had the chance to make a mint.

seems far less likely with circuit breakers in place

basemetal: Some might look at that as an opportunity.

exactly, let it burn.

why do dogs chase cars?

sigdiamond2000: I am SO glad I cashed out my 401K early and put everything into gold. I'll never have to worry about these crazy market fluctuations again.

Have fun with the penalties and taxes. And congratulations for being a sheep too!

enik: sigdiamond2000: I am SO glad I cashed out my 401K early and put everything into gold. I'll never have to worry about these crazy market fluctuations again.

Have fun with the penalties and taxes. And congratulations for being a sheep too!

Wow, 25 posts before someone got hooked. I'm surprised.

You mean the crashed caused by Senators being bought by financial institutions to relax regulations on them so they could cooks the books while risking other's peoples money and then eventually be bailed out by the Federal government?

Good thing that never happened again.

Debeo Summa Credo: enik: sigdiamond2000: I am SO glad I cashed out my 401K early and put everything into gold. I'll never have to worry about these crazy market fluctuations again.

Have fun with the penalties and taxes. And congratulations for being a sheep too!

Wow, 25 posts before someone got hooked. I'm surprised.

If he had really put everything into gold before about 2004, he would have made out like a bandit (in dollars).

namatad: value is a strange concept. the company is not work 10 billion dollars. it is worth exactly whatever people will pay for it on any given day. (sure, assets might have a fixed value, but most companies are more than the assets)

if tomorrow, everyone else in the world decides that the dollar is TOO risky and sells their dollars, the dollar would PLUMMET. If tomorrow, everyone decided that apple without steve jobs is basically worthless, the price of apple will fall through the bottom.

value is the aggregate belief in what something is worth.
and that is farked up when it comes to the stock market and the kids who work there.

Except for gold, which has intrinsic value. Ignorant sheeple think that the price of gold fluctuates, but it is actually the value of fiat currency that is unstable.

/RON PAUL

In the midst of the 87 market plunge is when I bought a bunch of Microsoft stock. Held on to it for years and made a fortune. So yeah, if the market does it again, I'll not only stomach it, I'll be looking to profit.

Parthenogenetic: namatad: value is a strange concept. the company is not work 10 billion dollars. it is worth exactly whatever people will pay for it on any given day. (sure, assets might have a fixed value, but most companies are more than the assets)

if tomorrow, everyone else in the world decides that the dollar is TOO risky and sells their dollars, the dollar would PLUMMET. If tomorrow, everyone decided that apple without steve jobs is basically worthless, the price of apple will fall through the bottom.

value is the aggregate belief in what something is worth.
and that is farked up when it comes to the stock market and the kids who work there.

Except for gold, which has intrinsic value. Ignorant sheeple think that the price of gold fluctuates, but it is actually the value of fiat currency that is unstable.

/RON PAUL

Yep, gold and real estate.

You and me can weather a 2600 point drop a lot better than the people that are currently being protested (unless your entire retirement is in the market... in which case your asking for it anyways)

As I see it (and I'm no expert or economist so... take w/ a grain of salt)...

One of the biggest problems we have right now is half the nation is living under a recession while the market seems to be chilling around 11k-12k. That is to say, the American people are experiencing a recession, while the "economy" that they have been so detached from seems to be listing and correcting without major (I mean MAJOR) concerns.

kbronsito: We are also out of coffee.

Everyone panic!

/not a b..
/a bomb

mainstreet62: impaler: Anyone younger than their mid-40s probably doesn't remember what happened 24 years ago today

I'm 35 and I remember it. It was kind of a big deal.

I'm 32 and I remember it.

I'm a fetus and I remember it.

/I WIN!

wingnut396: You mean the crashed caused by Senators being bought by financial institutions to relax regulations on them so they could cooks the books while risking other's peoples money and then eventually be bailed out by the Federal government?

Good thing that never happened again.

FTFY.

I know you young en's don't remember the S&L crises or bailout, but this has all happened before and it will all happen again.

mainstreet62: impaler: Anyone younger than their mid-40s probably doesn't remember what happened 24 years ago today

I'm 35 and I remember it. It was kind of a big deal.

I'm 32 and I remember it.

Shhh, let the boomer have his conceit that nobody under 40 knows history or matters.

Being rich is mostly about timing.

The Plunge Protection Team makes a killing every time they have their HFT algos cause a flash crash, which happens all the time now. That biatch Blythe Masters has to get that bonus somehow.

Ya, something similar will probably happen again, so I have a great idea, let's privatize Social Security and put it all in the stock market.

I love how the rich are trying to normalise the boom-bust cycle that their gutting of regulations is going to return us to.

Let's all just forget the 50 years of stability brought on by that regulation.

crushing theParallelUniverseParking: Would be nice if TFA would at least try to explain WHY that can happen anytime.

/Farking stock market crashes - how do they work?

Historically, the djia picks 30 stocks that statistically represents the us economy.

The problem is, CEO's lie, cheat and steal to cover up piss poor performance.

And they have deep roots, or too big to fail connections to be held accountable.

But eventually the truth gets out.

For example Boa and JPM are in the current index.They can carry real estate assets on their books at whatever value they think they are worth. They don't have to mark them to the actual lower price they can be sold for in today's market.


So eventually, this catches up with them. The market figures out that their assets are a house of cards. Once the price of BOA tanks, the credit rating drops, this kicks in capital requirement clauses on derivatives across the board, crushing the stock price further.

So once the financial component collapses, the index collapses. Stop loss orders kick in,

"Sell, Mortimer, sell"

and the crash feeds on itself. More and more people want to sell, there are no buyers, and the price tanks.

"The Insurer" - an ode to October 19, 1987
By Barry Ritholtz (new window)


Once upon a Monday dreary
Traders waited worn and weary
As they gazed upon news tickers
warning of the day in store
Foreign markets were imploding
sending senses of foreboding
With positions overloading
sellers would be bringing more
To dump upon a bloody floor
October now had past its middle
as investors faced this riddle
With their Quotrons they would fiddle
looking for The Bull of yore

Greenback's value falling quickly
trade deficit behaving sickly
And with Iran, relations prickly
raised the specter of a war
Ahead a day that promised gore

So on the open there came selling
much faster than the tape was telling
While in Chicago they were yelling
"Dynamic hedging" is no more!

Specialists were inundated
as futures prices unrelated
Kept the selling unabated
stocks once eight now sell at four

Futures dipped below the cash now
and insurers made a dash now
Trying not to be the last now
rushing for the exit door

Then news reporters often shrewder
began misquoting Chairman Ruder
A trading halt?...a new intruder
caused yet more panic on the floor

Bethesda had a guest named Nancy
an operation somewhat chancy
Helped to make the markets antsy
adding to our selling lore

Throughout the day as prices melted
brokers, dealers all got pelted
And bank accounts not safety-belted
were blown away forever more

The bell, it rang to end the sorrow
while traders ran to banks to borrow
To have an ante for tomorrow
not knowing what it held in store

Two dozen years have since gone by
with circuit breakers now we try
To tame computers gone awry
and restore calm upon the floor

The Dow now stands full six times higher
than when it closed that day so dire
despite two wars and terror fire
the Bull arose to run some more

This anniversary, headlines new
dwell upon that day we rue
They ask us veterans to review
a time that left us scared & sore

Yet chills we get from déjà vu
fear that banks may run askew
While trading partners threaten too
as in that sad October yore.

But keep your faith it's a new day
though there are hints that skies may turn gray
We'll hope such clouds won't bring a blue day
let's hope the Bull returns once more!!

I eat mop: I love how the rich are trying to normalise the boom-bust cycle that their gutting of regulations is going to return us to.

Let's all just forget the 50 years of stability brought on by that regulation.

What 50 years of stability are you imagining?