Crash of 1987 - Ten Years Later

On “Black Monday”, October 19,1987 the Dow Jones Industrial Average plunged over 500 points in a drop of over 20%. Almost immediately there were attempts to determine why the greatest crash since 1929 had happened and what the consequences were likely to be. For an early bibliographical account see The Stock Market Crash of October 1987: A Bibliography, by K.V. Nagarajan (DBW stack oversize Z1764.F5N34, 1990). For a contemporary examination from a Canadian perspective, see the article by the Ivey authors Hatch & White, “Anatomy of a Stock Market Crash: The Case of October 1987", Canadian Investment Review, Vol.2, No.1, 1989, p.6.

A decade later, the causes and consequences of the “Crash of ‘87” are still being debated. For a good 10th anniversary account see the article “A Decade and a Bull Ride Later, Complacency Reigns”, by Floyd Norris, New York Times, Oct. 19, 1997, Sect.3, p.1. (there are also other articles on the subject in the same issue). Canadian anniversary assessments can also be found. See, for example, “Is Crash II on the Horizon?”, Globe and Mail, October 18, 1997,Sect.B, p.1 and “Black Monday Ushered in Brighter Future”, in the London Free Press, October 18,1997, D2.

Those who are interested in an assessment of the "Crash" in Britain should consult the following articles: " 'Big Bang': A Chronology of Events," by Virginia Preston; " 'Big Bang': The October 1986 Stock Market Deregulation," ed. by Michael David Kandiah; "The October 1987 Stock Market Crash - Ten Years On," by David Kandiah and "The October 1987 Stock Market Crash" also by Kandiah. All of these articles are found on successive pages in one issue of Contemporary British History, Vol. 13, No.1, Spring, 1999, pp.95 - 165.

For additional studies, see the articles and books listed below. The articles were found by searching such electronic databases as Proquest ABI/Inform Global Research, Canadian Business and Current Affairs, and Lexis/Nexis. Seven of the 19 books listed were located by searching the subject “Stock Market Crash, 1987” on the catalogue. The others were found by using a broader word search strategy and in them one will find some mention of the “Crash”. See, for example the Collenteur book Economic Decision-Making in A Changing World, which contains a chapter by Lester Thurow: “The October 1987 Crash: A Worldwide Phenomenon”.

Web Sites

87 Crash, Charts and Stories of the 1987 Stock Market Crash

The Adviser.com - Can you explain the 1987 stock market crash?

Chart of the Dow Jones Average since the crash of 1987

www.sniper.at.market timing - stock market crash of 1987

Government Documents

The Brady Commission. Report of the Presidential Task Force on Market Mechanisms. Washington, D.C.: U.S. Government Printing Office, 1988. ( HG4915.U53 1988)

United States. General Accounting Office. Financial Markets - Preliminary Observations on the October 1987 Crash. ( HG4551.F45 1988)

U.S. Securities and Exchange Commission. The October 1987 Market Break: A Report by the Division of Market Break: A Report by the Division of Market Regulation. Washington, D.C.: U.S. Government Printing Office, February 1988. ( HG4910.O37 1988 )

Articles

Abken, Peter A. “Stock Market Activity in October 1987: The Brady, CFTC & SEC Reports.” Book Review, Economic Review. FRB of Atlanta, V. LXXIII, No.3, May/June 1988, pp.36-43. (BPO)

Arbel, Avner, Steven Carvell and Erik Postnieks. “The Smart Crash of October 19th.” Harvard Business Review, V.66, No.3, May/June 1988, pp.124-136. ()

Birch, David L. “After the Crash: The Real Reason Why the Economy Is Still Going Strong.” Inc. V.10, No.12, Dec 1988, pp.29-30. ()

Blume, Marshall E., Craig A. MacKinlay and Bruce Terker. “Order Imbalances and Stock Price Movements on October 19 and 20, 1987.” Journal of Finance, V.44, No.4, Sep 1989, pp.827-848. ()

Bose, Mihir. “The Crash of 87: What Lessons to Be Learned?” Director, V.42, No.3, Oct 1988, pp.56-59. ()

Buffin, Harold C. “Learning from the Causes of the Crash of 1987.” Employee Benefit Plan Review, V.42, No.8, Feb 1988, pp.12-14. (BPO)

Furbush, Dean. “Program Trading and Price Movement: Evidence from the October 1987 Market Crash.” Financial Management, V.18, No.3, Autumn 1989, pp.68-83. ()

Jahnke, William W. “The Crash of ’87.” Financial Analysts Journal, Nov/Dec 1987, pp.6-9

“Just when you thought it was over…John Authers reflects on an afternoon when one body blow followed another.” Financial Times, Jan.25/26, 1997, p.XX. (microfilm)

Keslar, Linda. “Crash of '87: Just Correcting 'Easy Come, Easy Go'.” Euromoney, Dec 1987, pp.39, 41. ()

Knowles, Bob. “Black Monday Not Another '29: Pru's Melone.” National Underwriter, V.91, No.46, Nov 16, 1987, pp.45, 49. ()

Laderman, Jeffrey M. “Did the Crash Make a Dent?; Dr. Doom and Dr. Gloom Are Still Prescribing Caution.” Business Week, Oct 17, 1988, pp.88-91. (BUSMFM)

Mintz, Watler. “Who? What? When? Where? How? Questions About the Crash No One Asked but Should Have.” Barron's, V.67, No.44, Nov 2, 1987, pp.26. (BUSMFM)

Nadler, Paul S. “A Look at Black Monday, One Year Later.” Secured Lender, V.44, No.6, Nov/Dec 1988, pp.20-25. (BPO)

Palmer, Jay. “What Do You Think? A Nationwide Poll of Reaction to the Crash.” Barron's, V.67,No.45, Nov 9, 1987, pp.16, 26. (BUSMFM)

Pfanner, Eric. “Taking In the Sites; A Renewed Focus on the Crash of ’87.” The New York Times, October 20, 1997, Section D, P.6. (Lexis/Nexis)

Roll, Richard. “The International Crash of October 1987.” Financial Analysts Journal, Sept/Oct 1988, pp.19-35. ()

Runkle, David E. “Why No Crunch from the Crash?” Federal Reserve Bank of Minneapolis Quarterly Review, V.12, No.1, Winter 1988, pp.2-7. (BPO)

Sheeline, William E. “Why the Crash Left Few Traces.” Fortune, V.118, No.9, Oct 24, 1988, pp.81, 84. ()

Smith, Anne Kates and Steven D. Kaye. “Prepared for Trouble: What Financial Leaders Learned from the ’87 Crash.” U.S. News & World Report, V.122, No.14, April 14, 1997, pp.59. (Lexis/Nexis)

“Stock markets suffer record crash in worldwide wave of panic selling.” Montreal Gazette, Oct 20, 1987, pp.A1,A2. (DBWMFM)

“Taking stock of the market crash: 4 economists say what it all means .” Toronto Star, Oct 25, 1987, pp.A8. (DBWMFM)

Books:

Arbel, Avner. Crash: Ten Days in October – Will it Strike Again? DBW stack HG4551.A67 1989

Armstrong, Hugo. Tricontinental: The Rise and Fall of a Merchant Bank. HG3449.V53A76 1995.

Bierman, Harold. The Great Myths of 1929 and the Lessons to be Learned. DBW stack HB3717 1929.B39 1991

Black Monday and the Future of Financial Markets. DBW stack HG4551.B465 1989

Bose, Mihir. The Crash: The Fundamental Flaws Which Caused the 1987-8 World Market Slump and What They Mean for Future Financial Stability. HG4636.B67 1988.

The Challenge of Information Technology for the Securities Markets: Liquidity, Volatility, and Global Trading. HG4515.5.C46 1989

Collenteur, G. A. and Jepma, C.J. Economic Decision-Making in a Changing World. DBW stack HF1359.E25 1993

Davis, E.P. Debt, Financial Fragility, and Systemic Risk. HG4028.D3D39 1992

Edwards, Franklin R. Futures and Options. HG6042.A3E38 1992

Fadiman, Mark. Rebuilding Wall Street: “After the Crash of ’87, Fifty Insiders Talk About Putting Wall Street Together Again”. HG4572.F33 1992

Ferleger, Lou. A New Mandate: Democratic Choices for a Prosperous Economy. DBW stack HC106.82.F47 1994

Ghosh, Atish R. Economic Cooperation in an Uncertain World. DBW stack HF1359.G49 1994

Graber, Doris. Ed. Media Power in Politics. DBW stack HN90.M3M43 2000

Hatch, James E. The October Crash: A Canadian Perspective. HF5006.L67 no.89-08

Kurtzman, Joel. The Death of Money: How the Electronic Economy has Destabilized the World’s Markets and Created Financial Chaos. HG220.A2K87 1993

Miller, Merton H. Financial Innovations and Market Volatility. DBW stack HG4910.M52 1991

Nagarajan, K.V. Stock Market Crash, 1987 – Bibliography. DBW oversize Z7164.F5N34 1990

Siegel, Jeremy J. Stocks for the Long Run: A Guide to Selecting Markets for Long-Term Growth. HG4661.S53 1994.

Strachman, Daniel Julian Robertson: Tiger in the Land of Bulls and Bears. HG4928.5.R63S77 2004

Toporowski, Jan. The Economics of Financial Markets and the 1987 Crash. DBW stack HG4523.T67 1993

Wood, Christopher. Boom and Bust. DBW stack HB3716.W73 1988