Market diary: the blues of black days 

Explore the history of finance with significant events that shook the world, not just on Mondays, but all days.

Mondays are often mysterious, sometimes monstrous too, in the world of finance. For, two dull and dormant days are hidden in their bellies (Saturdays and Sundays). In the intervening 48 hours of silence, tensions might simmer and smoulder that could shatter business empires. History is replete with a string of such events; however, these darker diaries were not written just on Mondays alone.

Let’s take a look at some of the roller-coaster events that shook the world of finance on all days of the week and our diary is not exhaustive.

Also known as the Great Crash, this was the day when stock markets across the globe went into a meltdown and according to Britannica, nearly half of the paper wealth of the world was eroded completely. In a single day, one of the U.S. benchmark indices Dow Jones Industrial Index (DJII) crashed by 22.6% (508 points) and nearly $500 billion worth of investors’ money went down the drain. Financial experts consider this event to be the single largest loss in the history of the stock market till date. The repercussions could be experienced by other countries too. In Australia and New Zealand, this event was termed as Black Tuesday, owing to the difference in the time zone.

In a similar vein, another devastating stock market crash in the United States that turned the world upside down was the one that happened on a Tuesday. This signalled a bad omen then and the Great depression was the writing on the wall, owing to the crash. According to Britannica, “on this day, more than 16 million shares were traded.” The DJII (Dow Jones) nosedived by another 12% fall, witnessing an abysmal close at 198, crashing by 183 points in less than two months.

It was on this day the United Kingdom was forced to withdraw its currency Sterling from the (first) European Exchange Rate Mechanism (ERM). Also known as Sterling crisis, this episode marked the failure of the United Kingdom to maintain its exchange rate above the stipulated lower limit for participating in the ERM. Owing to the Sterling crisis, the then ruling Conservative Party bit the dust in the elections that followed.

It is referred to as the infamous ‘gap-down’ opening of the stock market in the United States with the Wall Street down by 11% and hundreds of investors indulging in panic selling. Coupled with the Black Tuesday, these two days are considered the precursor to the Great Depression of all days. On this day, the Dow Jones veeredl into a tailspin drastically, at the time of opening, and loads of shares exchanged hands and people started selling stocks in a frenzy.

This is not just the U.S. Thanksgiving shopping holiday alone. In the world of finance, Black Friday denotes a catastrophic event that happened more than a century ago. This ‘black-swan’ kind of U.S. gold market collapse was owing to unscrupulous actions by a ring of speculators who manipulated the gold price. According to financial experts, the speculative actions were kickstarted by Wall Street speculators Jay Gould and James Fisk who indulged in cornering the gold market with an illicit motive.