Only TV Reporter at the 1987 Crash

Plunge_20071012_2
There is a terrific narrative by Jan Hopkins (Live From New York),
who was the only reporter on the floor of the NYSE the day of the
crash. She covered it live, and her reporting on the crash helped CNN
win a Peabody Award.

Here are her recollections:

"At best, most people
get to merely observe great events. On Oct. 19, 1987, I found myself
the narrator of one. On that Black Monday, I was the only TV reporter
broadcasting live throughout the day from the New York Stock Exchange.

That’s quite a contrast with today, when telecasts from the floor
are ubiquitous, and reporters seem to outnumber the NYSE’s dwindling
crew of specialists and traders. Although CNN didn’t regularly report
live from the exchange, we’d had a reporter there the previous Friday
when the Dow had shed 108 points, or 4.6%. I was assigned to go to the
exchange Monday, in case things got worse.

My producer, Barbara May, and I arrived well before the opening
bell. Our cameraman, Jim Peithman, lowered wires out a window of the
exchange balcony to our production truck, parked in an alley. For most
of the day, I was on that balcony with Gary Miller, a Big Board
employee assigned to keep an eye on us. His bosses decreed that we
couldn’t use camera lights because they might distract the traders and
specialists.

The market was tense as stocks continued their fall from the week
before. I did updates whenever a producer in Atlanta ordered one, each
time calculating the Dow’s slide by longhand with Barbara.

From where we stood, we couldn’t see the monitors that the stock
specialists used, and there were no huge plasma screens around the
trading floor as there are now. Barbara used an internal phone to call
the exchange’s market-news desk for the latest reading on the Dow.
Then, we did the math ourselves. We didn’t have access to computers,
and we hadn’t brought calculators. By shortly after 2 p.m., we realized
that the Dow had fallen more than 292 points, or 13%, to around 1950, a
decline that eclipsed the market’s previous worst one-day percentage
swoon — 12.82% on Oct. 28, 1929.

Until that juncture, I had been careful to stress that, despite the
large point decline, this was nothing like the 1929 crash. But now it
was worse. With its global satellite reach, CNN was broadcasting the
story live around the world. What we reported and how we reported it
had the potential to make a bad situation worse. I carefully chose my
words and tone, and tried to avoid expressing fear. Still, I had to
describe the panic developing below.

As the action intensified, the balcony became crowded with reporters
and photographers, awaiting the closing bell. I remember a sign at the
end of the day, indicating that the ticker was running several hours
behind. Eventually, we learned that stocks had plummeted 22.6% — that
would be about a 3,100-point drop now — to 1738.74. I remember the
traders’ uneaten lunches in paper bags. Most of all, I remember
thinking that we had been part of history.

Richard Torrenzano, the Big Board’s then-communications chief,
recently told me he believes the media helped calm investors on Black
Monday. That might have helped ease the way for the market recovery
that soon began."

Quite fascinating . . .

Source:
Black Monday – Part II   
ANDREW BARY 
Barron’s October 15, 2007 
http://online.barrons.com/article/SB119222899092857845.html

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What's been said:

Discussions found on the web:
  1. The Dirty Mac commented on Oct 15

    I remember getting into the car after work and putting on WFAN. Paraphrasing, “The Dow Jones Indistrial Average fell 508 points today in heavy trading. Game 3 of the World Series is tonight…”.

  2. jake commented on Oct 15

    many stock market gurus claim they predicted the 87 crash but only one really did…marty zweig..the friday before on “wall street week” with the late lou rukeyser.greatest market call ever!

  3. Jdog33 commented on Oct 15

    Barry, you said recently on Kudlow that you were a glass half empty kind of guy. I’m starting to think you were a bit over-optimistic on that call.

  4. dan commented on Oct 15

    I would add Elaine Garzarrelli to the list of guru’s calling the 87 peak. She aggressively recommended selling in August & Sept on the thesis that L/T interest rates were significantly higher than the earnings yield from equities – a.k.a. the fed model.

  5. jake commented on Oct 15

    marty zweig actually said crash… lou asked marty what he thought monday trading would bring..he replied “crash”.. greatest call ever

  6. eric commented on Oct 15

    It would be nice if someone could get the actual video clip out of the archives somewhere.

  7. michael schumacher commented on Oct 15

    That will NEVER be allowed to happen as we’ve just entered into The United States of Socialism with Hank’s bailout.

    Watch as each successive Repo becomes oversubscribed (when they were not at all except Friday of last week) as the “machine” demonstrates it’s artificial need for cash so that it gets another ill-timed rate cut.
    You’ll also see the market get taken down going into the next week (of course after options expiry.)

    if that SIV thing is not a bailout…then please show me what is.

    Ciao
    MS

  8. Justin commented on Oct 15

    I’m here reading Greenspans, book “The Age of Turbulence.” In it on pg 35, he’s in a class at Columbia, where Arthur Burns, is the professor. The professor asked, quote: “What causes inflation?” None of us could give him an answer. Professor Burns puffed on his pipe, then took it out of his mouth and declared, “Excess government spending causes inflation!.”

    We are in for a round of massive hyper-inflation, (which has already been mentioned on here, but it doesn’t hurt to remind us again),because not only do we have massive government spending, but a declining dollar. Buckle your seats everybody! That crash just might be coming…

  9. michael schumacher commented on Oct 15

    What floors me is that Citigroup actually had the strategy (or thought it would continue to work indefinatley) of just rolling over these shit assets each month and collecting the spread on them…..forever.

    That’s total chutzpah and of course it gets bailed out ’cause it’s too big to fail. I think the Hungarian Gov’t could use another baghdad bob……

    The same parable will be applied to China’s assets too…just wait.

    That these people continue to have jobs and collect paychecks is what is wrong with this country.

    Ciao
    MS

  10. John commented on Oct 15

    “Richard Torrenzano, the Big Board’s then-communications chief, recently told me he believes the media helped calm investors on Black Monday.”

    I doubt the same would be said today if a crash occurred.

  11. michael schumacher commented on Oct 15

    BTW a few quick calculations shows that this MLEC thing is only starting……based on the L2-3 assets and the fuzzy math these people subscribe to it appears that the banks will need about $100 billion every qtr. in order to keep these messes off the books.

    “greatest Business Environment in my lifetime”
    -Hank Paulsen on many occasions….usually after making yet another bottom call on housing

    if you are an overpaid, underdelivering bank executive then I guess he’s correct. BUt most of us are not…..

    Ciao
    MS

  12. Estragon commented on Oct 15

    MS,

    The MLEC thing was inevitable. Sooner or later, strong holders had to take out the weaker ones. In this case, the holders are the biggest of the banks, and they have an implicit put on these from the US treasury. They’re too big to be allowed to fail, and they know it.

  13. michael schumacher commented on Oct 15

    the problem ,for me, is that there are no strong portions of that market left any longer. Just the desire to do something with worthless assets…and the ongoing collection of the yearly bonus’.

    They have how much is funny money sitting around?? But the bonus structure is ALREADY funded in GS case.

    I suppose it was coming……I don’t have to like it though….LOL

    The problem is that it’s being presented as away to “help” the credit issues…….said it before….this is no longer about credit it’s about protecting the spreads (PM)and the continual invention of money to supply this “bottoming out” that, ironically enough, keeps happening each month-LOL

    I noticed that FBC (FOX Biz) hardly mentions it at all. When it does it’s the fluffy, good for all of us moment that we all knew they were capable of.

    Ciao
    MS

  14. Mike commented on Oct 15

    Presided over Sickening Plunges:

    Ronald Reagan 44.4
    1981 – 1989
    1: 10/19/1987 22.6
    2: 10/26/1987 8.0
    5: 10/13/1989 6.9
    6: 1/8/1988 6.9

    Bill Clinton 19.3
    1993 – 2001
    3: 10/27/1997 7.2
    8: 8/31/1998 6.4
    10: 4/14/2000 5.7

    G.W. Bush 7.1
    2001 –
    4: 9/1/2001 7.1

    Dwight Eisenhower 6.5
    1953 – 1961
    7: 9/26/1955 6.5

    John F. Kennedy 5.7
    1961 – 1963
    9: 5/28/1962 5.7

  15. RWW commented on Oct 15

    re: zweig “predicting” the crash. I’ve seen the re-run of his appearance on WSW a few times. When Zweig appeared on WSW Friday night, the crash was underway, in my opinion it started on Friday. If Zweig was really good, he would of unfurrowed his brow a bit and added to his commentary that if indeed he is right in his prediction, that it would be the buying opportunity of a generation, which it proved to be.

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