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A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History

A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History

by Diana B. Henriques


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The definitive account of the crash of 1987, a cautionary tale of how the U.S. financial system nearly collapsed—from the bestselling author of The Wizard of Lies

Monday, October 19, 1987, was by far the worst day in Wall Street history. The market fell 22.6 percent – almost twice as bad as the worst day of 1929 – equal to a one-day loss of nearly 5,000 points today.

Black Monday was more than seven years in the making and threatened nearly every U.S. financial institution. Drawing on superlative archival research and dozens of original interviews Diana B. Henriques weaves a tale of missed opportunities, market delusions, and destructive actions that stretched from the “silver crisis” of 1980 to turf battles in Washington, a poisonous rivalry between the New York Stock Exchange and the Chicago Mercantile Exchange, and the almost-fatal success of two California professors whose idea for reducing market risk spun terribly out of control. As the story hurtles forward, the players struggle to forestall a looming market meltdown and unexpected heroes step in to avert total disaster.

For thirty years, investors, regulators, and bankers have failed to heed the lessons of 1987, even as the same patterns have resurfaced, most spectacularly in the financial crisis of 2008. A First-Class Catastrophe offers a new way of looking not only at the past, but at our financial future as well.

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Product Details

ISBN-13: 9781627791649
Publisher: Holt, Henry & Company, Inc.
Publication date: 09/19/2017
Pages: 416
Sales rank: 1,179,466
Product dimensions: 6.10(w) x 9.40(h) x 1.40(d)

About the Author

Diana B. Henriques is the author of the New York Times bestseller The Wizard of Lies: Bernie Madoff and the Death of Trust, which has been made into an HBO film starring Robert De Niro. A writer for The New York Times since 1989, she is a George Polk Award winner and a Pulitzer Prize finalist. Her work has also received Harvard’s Goldsmith Prize for Investigative Reporting and the Worth Bingham Prize, among other honors. She lives in Hoboken, New Jersey.

Table of Contents

Cast of Characters xiii
Author’s Note xvii
Prologue 1

Part One: Vanishing Borders
1. Silver Thursday 9
2. Bright Ideas 20
3. Chicago vs. New York 30
4. Shifting Gears 44
5. A Deal in D.C. 54
6. Stock ­Futures, Bond Failures 66

Part Two: Titans and Wizards
7. A Plague from Oklahoma 81
8. Bulls and Banks 91
9. Chicago Rising 105
10. Arbitrage and Accommodation 113
11. Banks on the Brink 124

Part Three: Contagion
12. Mergers and Mutations 137
13. Berkeley Rising, Banks Falling 150
14. Witching Hours 160
15. Rational Markets? 171
16. Pandora’s Portfolios 183
17. January Omens, July Alarms 195

Part Four: Reckoning
18. The Worst Weeks Ever 213
19. 508 Points 228
20. Juggling Hand Grenades 248
21. Placing Blame, Dodging Real­ity 266

Epilogue 282
Notes 289
Acknowl­edgments 377
Index 381

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