Thursday, October 13, 2011
Black Monday Was No Bull
High interest rates. Value decline. Market crash. Recession. These buzz words may seem ripped from the headlines of today’s financial news section. However, during the month of October in 1987, these words would have rung with the same resonance as today. In the days leading up to Monday 19, a sharp drop in the value of the dollar and fears of rising interest rates coupled with a faltering bond market to portend what would eventually be the largest one-day percentage drop in stock market history. This perfect storm hit with a vengeance at the clang of the opening bell that fateful day. When the dust and the papers settled, what will be forever known as “Black Monday” was marked by a market drop of 508.32 points or 22.6%. That is $500 billion lost in one day! Perhaps the most shocking aspect of the crash was the rapidity of the plummet; what should have taken a few weeks, happened in a matter of days. Trading was so fervent that the ticker tape was running over two hours behind. Many Monday night newscasts were forced to report on the loss with no concrete closing number.
While there are still no clear-cut answers to what caused the crash, several factors seemed to have contributed. The aforementioned drop in dollar value and high interest rates lead to increased distrust in the market and newly implemented computer trading programs exacerbated the issue by blindly selling shares as the market declined.
The crash of 1987 sent shockwaves through the nation that touched almost every community. Much like the current campaign to “Occupy Wall Street,” frustrations with America’s financial instability fueled a public backlash. One artist, Italian sculptor Arturo Di Modica, was inspired to create a symbol of the "strength and power of the American people” (D. McFadden, Robert, New York Times, 12/16/89). The resulting creation was a 7,100 lb bronze Charging Bull, a popular Wall Street symbol of prosperity and financial optimism, for which Di Modica spent roughly $360,000 of his own money to create and cast. Two years after the crash, on the night of December 15, 1989, Di Modica and a posse of guerilla Santa Clauses drove a flatbed to the New York Stock Exchange and left New York her early Christmas gift under the 60 ft. tree. While the Bull was initially hauled away the next morning for obstructing traffic, the City heeded the public’s outcry for its reinstallation and reached an agreement through the NYC Dept. of Parks and Rec. to keep it on loan for the world to enjoy.
While many a native and visitor alike may not be aware of the pertinent connection between Black Monday and the bronze beast, it has done little to tarnish the public ardor for this iconic attraction.
See the Bull and much, much more on your next Wall Street Walks tour!