Photos: Black Monday, the 1987 market crash that made us rethink greed’s good

Give these guys a smoke break

A trader keeps an eye on a terminal at the New York Stock Exchange, Oct. 20, 1987, the day after Black Monday’s historic drop. (AP/Mario Cabrera)

There’s been a lot of Black Mondays over the course of history. A massacre in medieval Ireland; fatal storms in 14th-century England; the 1977 closure of a steel factory in Ohio. Bleak stuff, and, depending on your job, maybe every Monday is black. But for stock traders and investors, the term will always be linked to October 19, 1987 — the day when the Dow Jones Industrial Average plummeted 22.6 percent, its deepest single-day dip to date.

It took a confluence of events to tank the market that fateful October. Ramped-up hostilities between Iranian and U.S. forces in the Persian Gulf, a freak storm over England, the wariness of early attitudes toward computers and finance. Automated program trading and portfolio insurance are often blamed for the speed at which stocks were shed, but the exact cause may be unknowable. What’s clear is that on October 19, stock markets around the world lost huge amounts of money in a very short time. Beginning with a severe drop in Hong Kong’s Hang Seng Index, the crash accelerated in London’s FTSE100, which had been closed the previous Friday due to extreme weather. Over the course of the day, the Dow dropped more than 500 points. In Australia and New Zealand, where its effects would be felt for years to come, they called it Black Tuesday.

Trading at the Sydney Stock Exchange during the 1987 stock market crash, known there as “Black Tuesday.” (Fairfax Media via Getty Images)

Despite the losses, markets recovered quickly in the wake of Black Monday. By year’s end, the economy was booming again, initiating a bull market that would continue relentlessly until 2000. But the wake-up call forced Wall Street to make a few changes. Afterwards, the New York Stock Exchange instituted trading curbs, known colloquially as “circuit breakers,” giving exchanges the power to temporarily halt trading when losses get out of hand and theoretically interrupting the panic that leads to more crashes.

Press photos from the time cover a range of expected moments illustrating the invisible violence of market fluctuation. Exchange floor traders look exasperated. Brokers gaze worriedly at television screens, seemingly unsure of whether they need to go to work anymore. Overall, a sense of powerless confusion permeates each photo, which is pretty much synonymous with the average American’s experience with the mysterious forces of the market. This is capitalism crystallized for ordinary working people — a vast, unmanageable mechanism we have no control over yet which decides our livelihood at every moment of the day. Sure, these overcaffeinated traders, with their flamboyant cloaks, are recognizably human. But you can’t help but wonder what the hell they’re actually doing, and whether a bunch of dudes shouting at one another with scraps of paper in hand is the best way to go about it.

Traders crowd the New York Stock Exchange trading floor as stocks plunged in the biggest one-day selloff in history on Oct. 19, 1987. Floor trading has shrunk to a fraction of its volume from two decades ago as faster, cheaper, computers take over the process of establishing prices. (AP/Peter Morgan)

Traders on the floor of the New York Stock Exchange watch monitors for transactions on Black Monday. (AP/File)

A commuter reads the New York Post’s rundown of Wall Street’s 1987 stock market crash. (James Marshall/Corbis via Getty Images)

Business men keep an eye on an electronic display of stock activity in the window of Fidelity Investments after the opening of the NYSE in New York the day after Black Monday, on Tuesday, Oct. 20, 1987. (AP/Mario Suriani)

Senior citizens at First Union Brokerage Services, Inc., in the Diplomat Mall in Hallandale, Fla., keep an eye on stock market prices, Oct. 20, 1987, after the previous day’s market collapse. (AP/Kathy Willens)

(left) Crowds gather outside the New York Stock Exchange on “Black Monday,” Oct. 19, 1987 as the Dow Jones Industrial Average was on its way to losing 508 points, more than 22 percent of its value. (AP/Peter Morgan) | (right) Wall Streeters read about the previous day’s “bloodbath” on Oct. 20, 1987. (AP)

Passers-by watch the ticker on 42nd Street at Grand Central Station in New York, as the Dow Jones industrial average gained over 100 points, rebounding from the previous day’s drop on Oct. 20, 1987. (AP/Mario Suriani)

Gordon Robertson of Goldman Sachs gets a sample of Maalox, an antacid, near the back entrance to the New York Stock Exchange, Oct. 29, 1987. (AP/Mario Suriani)

Job counselors at the Irene Cohen Personnel Agency in New York are busy, April 12, 1988. Since the stock market crash panic that erased $500 billion of wealth overnight, at least 15,000 Wall Streeters were looking for work. (AP/Marty Lederhandler)

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