Markets changed since Black Monday crash

Simon Hampel · 17th Sep, 2016

Inside Business - 21/10/2007: Markets changed since Black Monday crash

Inside Business - 21-Oct-2007

We seem to get into celebrating the anniversaries of terrible events much more than those of happy ones: Anzac Day instead of the Kokoda Victory; 9/11 rather than the Camp David peace agreement on 9/17, 1978.

And Black Monday, of course, the sharemarket's worst ever day. By Friday I was thinking that if I heard someone else say they were worried the market would crash again just because it's the 20th anniversary of October the 20th 1987, I'd throttle them.

As it turned out, the Dow dropped 2.6 per cent on Friday, which got lots of professional yappers yapping about how spooky it was. In fact, Friday's fall was exactly one tenth of that fall 20 years ago, and, of course, had absolutely nothing to do with it.

The downturn of the US economy is entering a new phase, with 90 dollar oil the icing on the housing market cake.

If you worry about history repeating itself, you might miss what's really happening, which is worrying in itself, but differently.

On September 21st, 1987, before it started sinking, the All Ordinaries index had gone up 57 per cent that year. This year the rise is 20 per cent. The valuation then was about 40 per cent higher than now. So it is different this time.

Which doesn't necessarily mean it's fine this time, although I think it probably is.

The US economy is in trouble as the housing market continues to deteriorate and the high oil price is now making things worse.

But these days the United States is not the dominant economy it was and the US dollar is not the reserve currency it was.

So when the America sneezes now the rest of the world doesn't catch a cold.
Click to expand...

BillV · 23rd Oct, 2007

Sim said: ↑

So when the America sneezes now the rest of the world doesn't catch a cold. ]
Click to expand...

Actually I am worried that as the US are moving closer to a recession
they will be buying less imported goods from China, Europe and Asia.

This could have an impact on world prices of raw material and could affect our exports.

Cheers
Bill

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Markets changed since Black Monday crash

Simon Hampel Founder Staff Member

BillV Well-Known Member

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Markets changed since Black Monday crash

Simon Hampel Founder Staff Member

BillV Well-Known Member

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