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The Great Depression would follow,
The Dow, which had closed at 381.17 on September 3, 1929, would close at 41.22 on July 8, 1932. It wouldn’t make a new all-time high until November 23, 1954, more than twenty-five years after the crash.
The history of modern stock market crashes invariably includes some theoretically sophisticated yet poorly understood financial contraption that mutates when stressed, pushing an already weakened system closer to the cliff.
In 1907 it was the trust company, a hedge fund dressed as a savings and loan. In 1929 it was the levered investment trust, a massive stock market wager with little room for error. Portfolio insurance was another of these contraptions, though it would take more than a decade to metastasize.
entire market
was pulled higher by takeover battles, including those waged by other raiders who were fighting to buy companies in the same way Pickens was waging a battle for Gulf.
thirty bills were introduced into Congress in 1984 and 1985 meant to regulate takeovers. None passed. The investment banks, led by Drexel, were making a lot of money, enough to lobby these bills to death.
liquidity vanishes as markets plummet.
