Cashin: The worst Monday of all, nearly 30 years on

quote:

---

On the 27th anniversary of Black Monday on Oct. 19, 1987, market veteran Art Cashin, now the director of floor operations at UBS, recalls in vivid detail how the event transpired:

On this day in 1987 (that's 27 years ago, if you are burdened with a graduate degree), the New York Stock Exchange (ICE) had one of the most dramatic trading days of its 220-year history.

The Big Board suffered its largest single day percentage loss (22 percent) and its largest one-day point loss up until that day (508 points). No one who was on the floor that day will ever forget it. While it was an unforgettable single day, there were months of events that went into its making.
===================

The opening was not an outright disaster, but that was primarily due to the fact that many stocks did not open immediately. They were delayed, with indications to warn investors of the prices at which they might open (with hopes of inviting bargain hunters). Meanwhile in Chicago, where you could short without a plus-tick, prices were headed into freefall. Soon prices were lower in Chicago than in New York. That brought even more selling pressure to New York.

Shortly after the opening, as it became clear that this would be a very special and very dangerous day, several NYSE directors met in Chairman Phelan's office. They checked around the street to gauge any new trends in the selling pressure. They were also on the phone with the White House via former Sen. Howard Baker, who was White House chief of staff.

Meanwhile, back on the floor, the situation felt more unreal. Orders flowed in faster and faster and the tape ran later and later. (The tape was linear and the human eye can only recognize a certain number of symbols per second-900, I think. To run faster than that would make the tape an unreadable blur. Traders can trade faster than the maximum reading speed, so the tape ran late.) One broker said it was like a bizarre dream sequence: nothing seemed real.

In late morning there were signs that the markets might begin to stabilize. Then the newly appointed chairman of the Securities and Exchange Commission, David Ruder, was intercepted by reporters leaving a meeting at the Mayflower Hotel in Washington. Whatever they asked and whatever he said, it somehow was reported that the markets might have to be halted. Later, he would swear it was a typo but you can't unring a bell. The fear of a halt sent buyers scurrying away. Stocks went into virtual free fall.

LINK

---