Black Monday : the catastrophe of October 19, 1987, and beyond /

Metz's Black Monday is not another academic study of the causes and implications of the great stock market crash of October 1987. It is more dramatic, more exciting than that; it is minute-by-minute narrative of those events of last year. Metz fleshes out the formal analytical studies and puts faces and personalities to institutions and individuals. The events of October 19, 1987, are examined from the viewpoints of truly critical players: John J. Phelan Jr., chairman of the NYSE; E. Gerald Corrigan, president of the New York Federal Reserve Bank; Donald Stone, a specialist on the floor of the exchange; Scott R. Serfling, a futures trader on the Chicago Mercantile Exchange; and Paul E. Steiger, The Wall Street Journal editor in charge of covering the crash. Metz admirably captures the tension of the crisis. This work should enable readers to better understand the nature of today's financial environment with its interlinked markets and high-volatility levels. Although Metz's analysis of the crash is probably more open to debate than the author would care to admit, this book is an excellent acquisition for a popular business or nonacademic security analysis collection. It is also suitable supplementary reading for undergraduate students studying investments and financial markets. -S. P. Ferris, Virginia Polytechnic Institute and State University

October 19, 1987, will live in the minds of investors as the day of the stock market crash. Metz provides a greater appreciation of what was happening in the financial centers of the world during the 500-plus-point drop in the stock market, serving up background on executives of the major brokerage houses as well as the officers of the major exchanges. The text then moves on to an essentially chronological view of the events surrounding the collapse, concluding with explanations of how the bottom was reached and the markets rallied. While Metz's organization of chapters is occasionally confusing, the strength of his book lies in the detailed information it provides on the way stock, futures, and options markets interact. He also recounts the activities within the major exchanges, the large and small brokerage houses, and the Federal Reserve. An intriguing, behind-the-scenes look at Wall Street in the trenches. No index. GRH.

Among other observances, the first anniversary of the stock market's spectacular and chilling fall from grace will be marked by publication of Metz's telling retrospection. While The Wall Street Journal correspondent relies on the firsthand observations of key participants to provide an hour-by-hour account of the crash, he offers a wealth of perspectives on the implications as well as the circumstances of the debacle. Particularly notable is the persuasive case the author makes for the likelihood that the October 20 midday rally, which averted a complete collapse of the global financial system, was rigged at least in part. Equity prices (as measured by the Dow Jones Industrial Average) plunged nearly 23% on October 19, 1987. On the worst previous day (1929's Black Tuesday), the DJIA dropped less than 13%. Metz logs the experiences and emotions of influential people overtaken by events well beyond their control. His lineup includes the likes of John Phelan (Unflappable chairman of the New York Stock Exchange), a Big Board specialist charged with maintaining orderly markets in scores of blue-chip issues; E. Gerald Corrigan (president of New York's Federal Reserve Bank and a hero of the piece), a member of the Chicago Mercantile Exchange who trades in futures on the S&P 500 (an index contract that often exacerbates the latter-day volatility of Stock prices); and WSJ colleagues covering the biggest story of their lives. In reviewing the devastation of the world's flagship capital market, Metz fingers the usual suspects--arbitrageurs, program traders, portfolio insurance, panic-prone money managers, et al. His greatest contribution, though, is providing details that reduce an investment disaster whose dimensions still defy belief, let alone comprehension, to a human scale. After the close on Black Monday, the author recounts, dazed young men remained in the pits trying to sell Rolex watches, condominiums, or other personal possessions to meet margin calls. In the meantime, the AP computer--programmed to reject obviously erroneous quotes--proved incapable of posting final stock prices, so the job had to be completed by hand. Reportage of a very high order, as engrossing as it is enlightening. Copyright ©Kirkus Reviews, used with permission.