This month of festivities (Diwali, Dussehra, Durga Puja, and Id) is bringing anything but cheers to Dalal Street. Not that bourses are faring any better elsewhere. In fact, October, particularly its third week, has ominous rings to it in the annals of Wall Street. Here is why:
- October 17, 1907:- The Panic of 1907 began. In this financial crisis the New York Stock Exchange fell close to 50 % from its peak the previous year. There were runs on numerous banks and trusts. This crisis led to the downfall of the Knickerbocker Trust Company – New York City’s third largest trust.
- October 24, 1929 – Black Thursday. The Great Crash of 1929. October 28 and October 29 were worse, leading to widespread panic and the onset of unprecedented consequences for the US. The collapse continued for a month. This led to the Great Depression.
- October 19, 1987– Black Monday. On this day, the Dow Jones fell 22.6 % and the S&P-500, 20.4%. Between Oct 14 -19, the market lost 31 percent. The recovery from this crash was relatively quick.
- October 27, 1997 – Mini-crash caused by the economic crisis in Asia,a.k.a, Asian Flu. On this day, the points lost by Dow Jones still ranks as the sixth in its 112 year existence. The crash halted trading in the NYSE for the first-time ever.
In India, on October 24 (Black Friday) 2008, the BSE Sensex shed 1070 points, i.e. it crashed by 10.6 %. In that week on the whole, BSE lost 2400 points.
How I wish we had no October in the Gregorian calendar!
– G. Mohan
The Second Take 