October 19, 1987: Black Monday

Note that the "Bernie" in this sub-headline is Bernhard Goetz,

the 1984 "Subway Vigilante," not Senator Bernie Sanders,

future New York Police Commissioner Bernard Kerik,

or fraud financier Bernie Madoff.

October 19, 1987, 30 years ago: Black Monday. After the Dow Jones Industrial Average had the biggest drop, points-wise, in its history the preceding Friday, 108 points, and investors had all weekend long to worry, the Dow now has its biggest drop ever in terms of points, 508 (a record long since broken), 2,246.74 to 1,734; and its biggest drop ever in terms of percentage of total value, 22.6 percent (a record that still stands).

People began to wonder if this stock market crash would do what the one in 1929 did, and start a new depression. A cartoonist, remembering President Ronald Reagan's previous career as an actor, drew him "in his last and greatest role: The Herbert Hoover Story."

Ironically, the great conservative was saved by the heavy hand of the federal government: The Federal Reserve Board, chaired by Paul Volcker, appointed by Reagan's much-maligned predecessor, Jimmy Carter, stepped in, supplying banks with liquidity, and convincing them to lend to securities firms. As a result, the next day, the Dow had its largest one-day point gain ever, 102 points. Two days after that, the record was broken again, with the Dow rising 186 points. When 1987 ended, the Dow was still up 0.6 percent for the year.