the biggest stock market crash in history, page-7

It is 20 years this month since the biggest one-day stock market crash in history.

October 19, 1987, or Black Monday as it became known, was a day few in the financial markets will ever forget.

The Dow Jones industrial average plummeted 22.6 per cent in one day, wiping out almost a decade's worth of gains or in real terms US$500 billion.

To put that into context, the stock market crash that presaged the Great Depression in 1929 saw the Dow Jones industrial average fall by 12.8 per cent in the first day of selling.

October 1987 was a seminal moment in the history of stock markets and many at the time felt it heralded the start of yet another great depression.

In the United Kingdom, where the market collapse hit first, the FTSE 100 index of leading stocks fell by a staggering 26.4 per cent in one day.

Feverish selling spread across the world and by the end of October stock markets in Hong Kong had fallen 45.8 per cent, and here in Australia markets had plummeted by 41.8 per cent.

It is easy to sit here in 2007, as we soak up our own relatively modest recent stock market correction, to put the events of October 19, 1987, into some kind of historical context. We might see it as just a blip on the radar, a mere correction, which if viewed from afar made no fundamental difference to longer-term post-war share market growth.

To do that, however, would be a mistake. To get any real idea of what 1987 meant to the industry, we need to look through the eyes of those who were there at the time.

For many it was the end of their world. Some of the lucky city traders only lost their jobs, but others saw their lives evaporate overnight in a sea of pink sell-slips.

Investor Weekly spoke to a series of Black Monday survivors and hand-picked just a few of the more vivid accounts of that day. We did not have enough space to publish all the accounts of that fateful day in mid-October 1987, but we hope you agree that what follows brings to life some of the drama of that day.

In the words of one Black Monday survivor from Wall Street: "A recession is a period in which you tighten your belt; a depression a period in which you have no belt; and, when you have no pants to hold up, it's a panic. But Black Monday knocked even our socks off."