Monday the 19th October 1987
Further to the strong decline of the European and Asian values, the American investors envisage the worst the element release mechanism of the panic to Wall Sreet remains unquestionably the publication of the figures of the American trade gap, even if, during the first minutes of the session, the decline is still limited. One hour after the opening, the indication loses already 100 points.
But the worst is to come: the indication is going to decrease. Switchboards explode, and the computing capacities of this period are fast saturated. In the space of one day, the Dow Jones lose 22.6 %, it’s the worst day since its creation.
Even the crash of 1929 is of lesser amplitude. At the height of the crisis, it had moved back of 12.8 %. It was on Monday, October 28th, 1929. look at the first artical of the blog for information about 19129 carsh...
The next day, Tokyo falls in his turn, closing down of 15 %. Paris market also opens on a decline of 10 %, and in London the decline reaches 12 %. But the decision of the president of the stock exchange to close this last one is paradoxically going to provoke a resumption on the market: the Dow Jones index will indeed end in increase of 6 %. More than 600 million shares were exchanged in two days on October 19th and 20th, that is the triple of the volume of a normal September moth.
The causes of the crash
At the origin of the Crash, two phenomena: the strong fluctuations in the dollar and the appearance of the first systems of electronic quotations!
The dollar first of all. One of the main preoccupations at this time in the US was unquestionably the inflation. But the depreciation of the dollar had had beneficial effects for the American economy, by an increase of the exports. But the inflation and the devaluation continue, In fact pushed the speakers to anticipate a rise of the rates of Fed.
But another phenomenon is technological had played in favour of the appearance of the crash. The famous “computer trading”, these deals made automatically by computer. The accumulation of the orders stop had particularly played in the fall of markets.
Further to the strong decline of the European and Asian values, the American investors envisage the worst the element release mechanism of the panic to Wall Sreet remains unquestionably the publication of the figures of the American trade gap, even if, during the first minutes of the session, the decline is still limited. One hour after the opening, the indication loses already 100 points.
But the worst is to come: the indication is going to decrease. Switchboards explode, and the computing capacities of this period are fast saturated. In the space of one day, the Dow Jones lose 22.6 %, it’s the worst day since its creation.
Even the crash of 1929 is of lesser amplitude. At the height of the crisis, it had moved back of 12.8 %. It was on Monday, October 28th, 1929. look at the first artical of the blog for information about 19129 carsh...
The next day, Tokyo falls in his turn, closing down of 15 %. Paris market also opens on a decline of 10 %, and in London the decline reaches 12 %. But the decision of the president of the stock exchange to close this last one is paradoxically going to provoke a resumption on the market: the Dow Jones index will indeed end in increase of 6 %. More than 600 million shares were exchanged in two days on October 19th and 20th, that is the triple of the volume of a normal September moth.
The causes of the crash
At the origin of the Crash, two phenomena: the strong fluctuations in the dollar and the appearance of the first systems of electronic quotations!
The dollar first of all. One of the main preoccupations at this time in the US was unquestionably the inflation. But the depreciation of the dollar had had beneficial effects for the American economy, by an increase of the exports. But the inflation and the devaluation continue, In fact pushed the speakers to anticipate a rise of the rates of Fed.
But another phenomenon is technological had played in favour of the appearance of the crash. The famous “computer trading”, these deals made automatically by computer. The accumulation of the orders stop had particularly played in the fall of markets.
Geoffrey THIRIEZ geoffrey.thiriez@espeme.com
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