From: upgrade (fm1@amug.org)
Date: Tue Apr 25 2000 - 17:11:11 MDT
At 06:23 PM 4/25/00 -0400, "John Clark" <jonkc@worldnet.att.net> wrote:
>
>1929 could certainly happen again, if fact it already has, on October 17, 1987
>the market declined by 28%, twice as bad as the worst day in 1929, and yet in
>retrospect we can say that 1987 was no big deal. The real question is if the
>unprecedented 1929 to 1933 bear market could ever happen again.
>Forget about head and shoulders tops, triple bottoms, or high PE ratios, a
>disaster
>of that magnitude could only happen if we entered a catastrophic global
>depression,
>and that could only happen if government regulators get too creative.
<snip>
I was in London in 1987, designing and programming a computer
system for a broker dealing in stocks, bonds, commodities, futures,
options, currencies, and some other financial instruments. I watched
the stock trading screens go all red. My initial impression was: DISASTER.
Until someone indicated to me that in 1929 stocks were a large
percentage of the universe of financial instruments. But in 1987 stocks
were a much smaller portion of this universe, So, the 1987 crash had
little impact on the total economy.
For such reasons it's quite conceivable that a 1929-type stock market
crash (while other financial instruments held up) would have a limited
impact on the total economy in 2000.
Frederick Mann
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