There are many excellent films, depending on your taste, about the unraveling of the world because of events too large and disastrous to comprehend - "The Day The Earth Stood Still," "The Day After," "28 Days Later," and so on. Wall Street has its own set of disastrous days that still haunt the street. These are, of course, the Black Days, and they play a large part in this week in financial history. (Missed last week's article? Check out Wall Street History: Panics, Scandals And Rogue Traders (Oh My!).)

IN PICTURES: Top 10 Financial Blessings Of 2009

A Black Week
Last week we looked at Black Thursday, a day in which a record number of shares changed hands in panic selling. October 25, 1929, marks Black Friday. This day was a continuation of Black Thursday with prices sliding down on high volume, but Wall Street managed to break the slide when a group of bankers began placing higher than market bids on large stocks.

On Black Monday, however, the slide resumed and took the market down 13%. Black Tuesday saw another attempt to halt the panic selling by the Rockefeller family and other titans like William C. Durant (founder of GM). Despite the capital inflows, the trend was firmly and sharply downwards. The record trading of Black Thursday was shattered on Black Tuesday when 16.4 million shares traded as investors swamped exchanges with sell orders in an attempt to get out of the market with whatever wealth they could salvage.

Although Black Tuesday marks the last of the black days, the market would eventually shed a full 89% from a peak of 381.17 recorded more than a month earlier on September 3, 1929. Although we've tried to equal it recently, this mark stands as the most severe drop in history.

Cracking the Kiwi
On October 27, 1987, Andrew Krieger, a currency trader at Bankers Trust, allegedly sold short more kiwis than the entire money supply of New Zealand. The kiwi dropped 3.7% in a single day and Krieger banked his profits. Krieger was one of the first currency traders to use options effectively and his trade has become legendary in some circles. As the story goes, government officials called his bank during the big short and personally asked him to stop. Krieger later left the bank and went to work for George Soros. (George Soros spent decades as one of the world's elite investors, and even he didn't always come out on top. But when he did, it was spectacular. Check out George Soros: The Philosophy Of An Elite Investor.)

The Mini-Crash
On October 27, 1997, exchange circuit breakers were triggered when the DJIA dropped 554 points. The dip was worldwide and mostly driven by fears of a contagion from a brewing economic crisis in Asia. Traders were angered by the halt because, although 500 looks like a significant number, it represented less than a 5% drop. The NYSE used the circuit breakers twice that day and even closed the exchange early. Fears of a global meltdown proved unfounded as the market began to climb the very next day.

IN PICTURES: 6 Major Credit Card Mistakes

Credit Card Horrors
Appropriately on October 31, 1978, the Supreme Court began hearing Marquette National Bank vs. First of Omaha Corp. This argument was over which state laws govern loan agreements. The reason this point was so important is that the laws of states, specifically caps on interest rates known as usury laws. Many credit card companies were truly hurting as inflation raced above their state-mandated interest maximums. The ruling in favor of giving precedence to the laws of the state where the loan originated - essentially the state where companies were headquartered - led to many credit card companies relocating to states with friendly laws. Essentially, this decision allowed card issuers to charge higher interest rates by simply relocating their credit issuing arms to states with friendly usury laws. When inflation rates fell, interest rates on credit cards did not.

That's all for this week. Next week we'll celebrate an important birthday, take a look at an interesting death and much more.

For the latest financial news, see Water Cooler Finance: Ghosts Of Economies Past.

Related Articles
  1. Investing

    What’s Holding Back the U.S. Consumer

    Even as job growth has surged and gasoline prices have plunged, U.S. consumers are proving slow to respond and repair their overextended balance sheets.
  2. Savings

    How Volatile Exchange Rates Affect Your Vacation

    Those ever-changing fluctuations can make a difference in anything from your hotel room to an ATM transaction.
  3. Credit & Loans

    Can Corporate Credit Cards Affect Your Credit?

    Corporate cards have a hidden downside. If the company fails to pay its bills, you could be liable for the amount and end up with a damaged credit rating.
  4. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  5. Economics

    A Look at Greece’s Messy Fiscal Policy

    Investigate the muddy fiscal policy, tax problems, and inability to institute austerity that created the Greek crises in 2010 and 2015.
  6. Investing News

    What Is The New Credit Card Chip Good For?

    Under current U.S. credit card requirements, credit card issuers are required to issue chip cards as of October 1, 2015. Instead of swiping your card as you do now, you will slide the card into ...
  7. Professionals

    Tips for Helping Clients Though Market Corrections

    When the stock market sees a steep drop, clients are bound to get anxious. Here are some tips for talking them off the ledge.
  8. Stock Analysis

    The Safest Stocks You Can Invest in Right Now

    These stocks are likely to hold up better than others in a bear market, but there's a twist.
  9. Investing Basics

    5 Reasons to Expect Lower Stock Returns

    Lower stock returns are likely here to stay for some time. Here are five reasons why.
  10. Credit & Loans

    5 Ways to Maximize Your Credit Card Points

    How to get the most bang for your rewards buck.
RELATED TERMS
  1. Transferable Points Programs

    With transferable points programs, customers earn points by using ...
  2. Regional Asset Liquidation Agreement ...

    An agreement between an asset manager and the Federal Deposit ...
  3. The New Deal

    A series of domestic programs designed to help the United States ...
  4. Luhn Algorithm

    An algorithm used to validate a credit card number.
  5. Accelerated Resolution Program ...

    A program designed to reduce the time and cost of resolving failed ...
  6. Roll Rate

    The percentage of credit card users who become increasingly delinquent ...
RELATED FAQS
  1. How does the risk of investing in the industrial sector compare to the broader market?

    There is increased risk when investing in the industrial sector compared to the broader market due to high debt loads and ... Read Full Answer >>
  2. How can I hedge my portfolio to protect from a decline in the retail sector?

    The retail sector provides growth investors with a great opportunity for better-than-average gains during periods of market ... Read Full Answer >>
  3. What is the correlation between term structure of interest rates and recessions?

    There is no question that interest rates have enormous macroeconomic importance. Many economists and analysts believe the ... Read Full Answer >>
  4. Why should an investor in the retail sector consider the Consumer Confidence Index?

    Investors in the retail sector should consider the Consumer Confidence Index, or CCI, because it measures how consumers feel ... Read Full Answer >>
  5. Which type of retailers tend to perform best during weak periods in the economy?

    Retail is a broad investment sector comprising many different market segments, such as automotive, building supply, grocery ... Read Full Answer >>
  6. What category of retailers will perform most strongly when the economy is doing well?

    When the economy is doing well, the market segments that perform best are volatile segments with products and services that ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!