The true cause of one of the most catastrophic economic events in the latter half of the 20th century remained a mystery. Dr Greenspan said the stockmarket crash of 1987 hit with ferocity that took everyone by surprise. "WE DON'T KNOW TO THIS DAY THE CAUSE OF IT".
But yet we find it convient day after day to pick a reason for the market declining and rising, normally along the lines that the market went up or down because of BHP's profit result etc, but yet we can not find a reason for the largest % fall in financial history?
Let's have a look at recent headlines:
-Australian Stock Market Declines Led By Telstra And Banking Stocks
But yet why wasn't the market up:
- Property market still attractive: report -Oil prices higher in Asian trade as rhetoric over Iran heats up -Woolworths boosts profit guidance
Evidently with so many variables at play we can find a justification for anything upon knowing the result. Look at some of the headlines from last week:
-Australian Stock Market Advances, Led By Coles Myer-Australian Stock Market Advances, Led By Better-than-expected Earnings Results
Are you sure? Hasn't the market been rising for about 3yrs now, are you sure its not rising just because its rising?
What if today we had the same headline:
-Australian Stock Market Declines Led By Telstra And Banking Stocks
But instead of the market been down 0.7% or so it was -20% or +20%, would that still sufice for a reason or a cause?? Most likely not. But thats exactly the same headlines that would have been around if the markets had not crashed in 1987, but yet it did and we still don't have a reason for it.
Don't you think thats strange? When something is that large we can't write it off to one of the several minor factors anymore and suddenly there is no reason for it, you would think there would be more reasons for a large decline then a small one right?
Perhaps there is more behind of veil of price.
Finally, "Forces building for the next recession", what forces, the same forces that caused the 1987 crash, yes/no? Why do we have a government or federal reserve? Its to manage those forces right? If so then how can these forces be building and signal a looming reseccion? If we truely had ANY control over these "forces" would we not dismantle them and destroy the threat?
(20min delay)