Anyone know? It couldn't be because price was too overvalued..
What caused the '87 Crash?
- Thread starter Bullz n Bearz
- Start date
Quote from jzlucas:
The same thing that caused the current decline...
me shorting.
It was because I my broker talked me out of buying those OEX puts on the previous Friday. He told me the markets had already fallen enough (something like 10% that week) and were poised to go up.
and the answer is THE FEDERAL RESERVE.
they have lowerd rates to the point of making the dollar worthless.
it allowed all this pulling equity out of everyones' homes and put everyone in huge debt. AMERICANS will be homeless and broke very soon its scary
they have lowerd rates to the point of making the dollar worthless.
it allowed all this pulling equity out of everyones' homes and put everyone in huge debt. AMERICANS will be homeless and broke very soon its scary
bullshit...
I lived thru the 87 crash and it was a singular idea that portfolio insurance could be had by shorting the SP 500 against any position of like value....and finally the Fed told Goldman and Morgan to lay off and let the indexes level off .....
there were no bids in the pits and the Feds. stepped in and told the houses to knock off the joke.....
I lived thru the 87 crash and it was a singular idea that portfolio insurance could be had by shorting the SP 500 against any position of like value....and finally the Fed told Goldman and Morgan to lay off and let the indexes level off .....
there were no bids in the pits and the Feds. stepped in and told the houses to knock off the joke.....
I recollect it was Jim Baker.
But the setup happened long before that: rates had been rising since Spring but had been ignored and the market was in a bit of a bubble. (A few people including Paul Tudor Jones had modeled a comparison of the movement leading up to the '87 crash to the price movement in '28-'29.) Throw in portfolio insurance also, which lent an air of invincibility to the market, and which failed miserably as liquidity dried up.