Black Thursday: 79 Years Ago Today

by StockJockey

Friday, October 24, 2008 - 6:13 pm

Well that was fun.

I am not sure I have seen that much panic pre-market, ever. Of course the lows were on the open. Textbook stuff.

But there is still plenty of time to panic, if you go back to your history books. Black Thursday was just the start of things...although we have already witnessed a ton of pain.

Here is something to think about over the weekend, after a somewhat panicky day in the markets.

Today is the anniversary of “Black Thursday,” which many historians consider to be the first day of the great stock market crash of 1929. On that day, a long stock selloff—caused by the bursting of a speculative bubble inflated with borrowed money—accelerated dramatically.

Trading volume spiked that day, to a then-record 12.9 million shares, with the mechanical stock ticker running more than three hours behind the frenzy of selling on the exchange floor.

A bailout, this one arranged by banks coordinated by J.P. Morgan, pledged to stem the losses by bidding above-market prices for blue-chip stocks—a technique that had quelled the panic of 1907.

But on the following Monday, the panic returned and the Dow Jones Industrial Average fell 13 percent. The next day, it dropped another 12 percent as 16 million shares changed hands—an astounding number at the time.

By the time the Dow really touched bottom, in July 1932, it stood at 41.22—89 percent below its peak in early September 1929.

Have a nice weekend. Portfolio

We have already crashed; moves are compressed in this day and age. But the charts from 1929-’33 are fun to look at. At least for the more twisted among you.

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Happy Anniversary, Crash of 1929
Portfolio Magazine
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Worst Two Month Periods-Note Starting Date

Dow Jones industrials (1920 to 2008)

1. April-May 1932, down 39%
2. March-April 1932, down 31%
3. October-November 1929, down 30%
4. October-November 1987, down 29%
5. August-September 1931, down 29%
6. September-October 1929, down 28%
7. September-October 2008, down 27%
8. November-December 1931, down 26%
9. April-May 1931, down 25%
10. September-October 1987, down 25%

Standard & Poor’s 500 (1928-2008)

1. April-May 1932, down 39%
2. September-October 2008, down 32%
3. March-April 1932, down 30%
4. August-September 1931, down 29%
5. October-November 1987, down 28%
6. September-October 1931, down 25%
7. May-June 1932, down 24%
8. April-May 1940, down 24%
9. September-October 1929, down 24%
10. September-October 1987, down 24%

Nasdaq composite (1971-2008)

1. September-October 2008, down 34%
2. February-March 2001, down 34%
3. October-November 1987, down 31%
4. October-November 2000, down 29%
5. September-October 1987, down 29%
6. November-December 2000, down 27%
7. August-September 2001, down 26%
8. April-May 2000, down 26%
9. August-September 1990, down 21%
10. July-August 1998, down 21%

United Panic
Floyd Norris
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The Parallels between the late 1920’s and the past few years are amazing.

Stock pools and speculators/hedgistan, crooked journalists/bloggers, easy credit/leverage, overmatched regulators/PPT, a fraying econony while the market rallied ...its all here. The best hour you could spend this weekend. Lots of Jesse Livermore for fans of the trader.

The Crash of 1929

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