Stock Market crashes of the last 100 years
TABLE - TOP 20 STOCK MARKET CRASHES Many commentators believe that the trigger for the drop was actually a failed leveraged bailout deal whereby UAL Corporation was attempting to acquire United Airlines. The deal was bunkered when the Association of Flight Attendants (AFA) voted against accepting the proposed deal which was backed by management. Consequently, the $6.9 billion deal collapsed and with it the whole market. The problem is that this reasoning doesn’t stand up to closer scrutiny, as the market actually started dropping before the breakdown of the deal. Again, a lot of market commentators blamed automatic selling by computers as one of the main causes that led to the large drop, as in the 1989 crash. Two lessons to learn: first, sometimes it is required to just halt the market to allow traders to get some fresh air and clear their thoughts — hence the introduction in later years of so called “circuit breakers”. Secondly, the pre-programmed strategies of multitude computers to sell on declines could be disastrous. The first warning was in 1987. This was the second...
January 2013
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