Stock Market Crash Of 1987

Compared with The Big One, the one in '29...and The Second Big One, the one in '08/'09...the '87 Crash was really a...Crash Lite. (See: Junk Bonds.)

The cause of the mini-crash? Yeah, a lot like the '29 crash. Cheap and easy credit. High yield bonds, which notionally promised to pay back returns before common stock, appeared to investors to carry vastly less risk than did equity investments. And, in fact, they carried about the same. Tons of companies had over-borrowed and over-leveraged, and even the professionals and banks got suckered in.

So then an alarm went off. Shareholders sold. Then automatic-sell orders followed (yes, it was the early days of articial intelligence-driven black box investing). And, all of a sudden, there was a much higher supply of shares than there was demand for them.

Air pockets of market drop followed. A number of banks failed (albeit a small number). Fingers were pointed. Greed was the culprit. Fear was the winner.

For a few months. The market quickly recovered, and investors "bet on America again" (great Warren Buffet phrase). So for all you Nervous Nellies who keep betting against America, we hear there's some nice land in Cuba for you. Knock yourself out.