Media Still Have Bad Case of (Black) Mondays 20 Years Later
The similarities are eerie. On Oct. 19, 1987, the day of the Black Monday stock market crash there was trouble from the Iranians, a two-term Republican president nearing the end of his term and a network TV news media voicing warnings the American economy might be doomed. Except this day in 1987, the stock market dropped 508 points.
“It’s a day that will be in bold print in history books – Black Monday, October 19th, 1987, when the stock market went into a freefall, losing more in one day than it did on Black Tuesday in 1929,” anchor Tom Brokaw said on the Oct. 19, 1987, NBC “Nightly News.” “And while conditions are much stronger now than they were then, today’s precipitous plunge struck fear in the hearts and pocketbooks of even Wall Street veterans.”
CNN even warned for the worst: “[N]ow some analysts argue that the stock market’s recent activity is heading for recession, if not depression in the 1990s,” said CNN correspondent Mark Left on the Oct. 19, 1987, CNN “PrimeNews.”
A depression in the 1990s? How’d that prediction work out?
The United States suffered a mild recession after Black Monday – only two quarters of negative economic growth in the late 1980s, but nothing along the lines of a depression.
Still, there was the element of looking to blame someone in government for the crash.
“Isn’t there a problem that there seems to be a lack of political and economic coherence in Washington these days?” Brokaw asked on a NBC News “Stock Market Special Report” on Oct. 19, 1987. “There’s no master game plan. We’ve got [Secretary of the Treasury James] Baker saying one thing over the weekend, and [Federal Reserve Chairman] Alan Greenspan new on the job, and the president distracted by a lot of other things.”
Twenty years later, Greenspan is beloved by the media as an economic genius.
The end of the American economy never came. According to an article in the Oct. 18, 2007, San Francisco Chronicle, if you had remained confident in the market you would have come out ahead. “If you had invested $1,000 in the S&P 500 index at the close of trading on Oct. 19, 1987, and reinvested your dividends, today you would have nearly $10,800, according to S&P's Howard Silverblatt,” Kathleen Pender wrote.
Even adjusted for inflation, that would have been a $1,835 investment in the S&P 500 in 2007 dollars, but still an impressive return on your investment nonetheless.