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April 22, 2014 at 03:05 AM
Twenty-six doesn’t seem to be a magic number. But beginning a list of anxiety-producing events with Black Monday, a day, 26.4 years ago, that the stock market plummeted dramatically, seems okay for the purpose of making a point. One could look at any 26.4 year period and things to worry about that created stock-market angst for many probably wouldn’t be all that different.
This list is composed of things I remembered without trying hard. You may do better.
After surviving this list, the stock market and investing may endure anything, except the earth being directly hit by a comet or the failure of the sun. Not all of the items have enough gravitas to move the market into negative territory, but all of them probably had power enough to cause a number of people to worry excessively and exit investing at the wrong time.
The events in the following list are not exactly in order of occurrence, except that the list starts on Black Monday, and everything happens after that day.
1. October 19, 1987, Black Monday. The market fell and scared everyone, big time.
2. Chinese Takeover of Hong Kong–everyone feared that HK would become like China, but, really, China became more like HK. Who would have known?
3. Asian Currency Crisis.
4. Failure of Long Term Capital Management. This could have been the end, but wasn’t.
5. Russian bond default. Russia is in trouble economically again now; it’s a great place to invest right up until it isn’t and then it’s scary, really scary.
6. Japan takes over the world, economically (this theory was persistent in the 1980s, but began to wane as the 90s approached; now Japan is in third place for GDP and is having problems).
7. Baring’s trading scandal, which ultimately took down the investment bank.
8. 1993 World Trade Center bombing. The first one. I was at a conference in lower Manhattan not long after and saw the damage.
9. Washington 1990s storms: Travelgate; Hillary cattle futures killing; Whitewater; Vince Foster suicide, Monica’s dress and the impeachment; the Clintons not only survived, they thrived and the Bill, Hillary and Chelsea Clinton Foundation is a star non-profit. He was around for the 1990’s tech bubble, a good thing, and was active in repealing Glass Steagall, maybe not a great idea. Hillary is a former secretary of state and a likely candidate for president.
10. Y2K. Were you frightened? It was a non-event.
11. Tech Bubble–3/2000 to 3/2003. In the 1990s, no one could lose money in the market and so everyone got used to making great gobs of account values without thinking, not a great idea, as the period following proved.
12. Bad intel from the CIA about Iraq: WMD! Well, a majority believed there were weapons of mass destruction at the time. Moral: some dictators are blowhards and will say anything to get attention.
13. Wars—3.3 of them, Including Iraq twice—the first Iraqi war was in 1990-1991, at the end of the George H.W. Bush administration; there are still aftereffects from the 2nd World Trade Center bombing. (As many as 3.3 wars?; that’s a lot of wars.)
14. George W. Bush’s missing Air National Guard records (it might be hard to find my military records, too, and I was regular U.S. Navy, but anything gone from my file would likely not create a scandal). President Bush is now an artist. History may be kinder to him than many think.
15. The Grand Credit Debacle of 2008, which, I argue, started in mid-summer of 2007, when it began to be hard, if not impossible, to price credit.
16. The failures of Lehman Brothers and Bear Stearns, two storied investment banks.
17. The adventures of Elliot Spitzer, NY attorney general, who fined mutual fund companies for late trading (they seemed to pay large sums without a whimper). Many of the selfsame funds, and others too, instituted rules that restricted regular customers, customers who had nothing to do with the problems Spitzer uncovered. Spitzer got to be the governor of NY for a few days, but he seemed to have made enemies on the way up and was, even before he was the state’s CEO, unable to be a bad boy invisibly. He had to resign.
18. B. Madoff, low-life bastard, screwing customers and making life hell for many, who, I’m sure, hope he rots in that aforementioned fiery location.
