The American economy should have collapsed 32 years ago.
October 19, 1987 went down in US history as Black Monday. On this day, the American economy was closer than ever to collapse.
Prior days
The day of October 14 at New York was passed in the usual madness, accompanied by the joyful exclamations of brokers who made a good deal and curses at the wrong ones.
But in the evening, brokers suffered a shock: the Dow Jones index fell 96 points. It was the deepest drop in the history of the New York Stock Exchange.
The next day ended with a fall by 58 points, and on October 16 - by 108! The exchange broke the record for a fall twice in 3 days, which did not promise anything good. But what does not happen in the world of capital! Exchange analysts were confident that Monday would put everything in its place. But they were wrong.
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Black monday
In the morning trading opened not with growth, but with a fall. The number of deals made went up sharply, and everyone was selling. Almost immediately, the super-fast computer of the New York Stock Exchange could not stand the abundance of transactions and froze. Operations continued, but the computer was performing operations with 85 minutes latency. On the stock exchange, the situation changes every second, brokers make dozens of transactions per hour, reacting to the slightest fluctuations in stock prices. A delay of 15-20 minutes is an emergency, and at 85 it simply killed the exchange. The stock market went haywire. Stocks weren't just going down, they were going down.
At 13:00, David Ruther, chairman of the Securities and Exchange Commission, voiced his opinion on the need to suspend trading on air, which only spurred panic. At half past three, it became clear that the market began to crumble according to the domino principle, each bankrupt company dragged 2-3 others along. The late afternoon was catastrophic - 3 hours. At 17:00, the exchange closed, fixing a drop in the Dow Jones index by 508 points, with 300 of them falling in the last hour of trading.
The US economy is on the brink of ruin
In just one day, America has lost a third of its incalculable wealth. Hundreds of companies could have considered themselves bankrupt. From now on, they could not count on loans or investments, since their shares were no longer worth anything. Tons of once securities could now be pasted over the walls. The head of the New York Stock Exchange, John Philan, proposed to close trading.
The crash on October 19, 1987 surpassed the disaster on October 29, 1929, which set the wheel of the Great Depression out of which the United States was able to emerge only by the mid-1940s, thanks to the Second World War. Then the drop in the index was 12% (in 1987 - 22.6%). White House officials were prostrated: it was truly the end of the world. The next day, the entire Western economy was to collapse.
The rescue
The Savior Angel was the President of the Federal Reserve Bank of New York Gerald Corrigan. He convinced the authorities that there were no economic prerequisites for the collapse, persuaded not to close the exchange and allocate billions of dollars from the federal reserve system to save the situation. The market stood, America was saved. And although the consequences of Black Monday affected the whole world (by the end of October, UK exchanges lost 26.4%, Hong Kong - 45.8%, Canada - 22.5%, Australia - 41.8%), hundreds of companies and dozens of people went bankrupt. the collapse of the Western economy did not happen. But what caused it? And this is where the oddities begin.
Stock market crash out of the blue
The official reason is considered to be the excessive use of software trading, they say, computers did not cope with the dramatically increased number of transactions, which brought the situation out of control. But what provoked a sharp surge in activity on the exchange?
As Corrigan rightly determined, there was no economic prerequisite for the collapse. Exchange analysts agree with him on this, and life itself has confirmed this: the situation on the exchange stabilized within a day, and the market itself had straightened out after two years. No second Great Depression happened.
The investigation revealed that the collapse began with the Hong Kong stock exchange, where, for some unknown reason, massive sales of assets began at bargain prices. The process spread to Australia, Europe and only then hit the United States. What kind of madness gripped the small holders of shares, that they conspired among themselves, first bought everything that was at hand, and then at the same time threw away what was bought at bargain prices? Obviously, the process was manageable.
It is foolish to suspect that one of the major Western financiers has organized a panic in order to buy up the depreciated assets of companies on the cheap. What is the purpose of becoming king in the ashes? - there are no such idiots among the oligarchs. And the scale is not the same. External sabotage remains.
The hand of Moscow?
Since 1983, under the roof of Vnesheconombank, gold and foreign currency have been massively exported from the USSR to VEB's branches in London, Australia, Hong Kong and Singapore. Gold was sold, and the resulting currency was dissolved in offshore accounts. Almost a thousand tons of gold has evaporated somewhere. The version that Black Monday was organized for this gold looks quite reasonable.
In 1987, seeing how the Soviet economy was gradually losing its positions in the struggle with the West, the leaders of the USSR could well have decided to overthrow the United States by organizing an exchange crisis. One can only guess what the world would look like if the blow were fatal.