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Quote of the Day
“October 24th, 1929 was not the first day of the big breaks in stocks, nor was it the last. It was not the largest day in point of volume of stocks dealt in and, on balance, the decline of prices was not large. Nevertheless, it was the most terrifying and unreal day I have ever seen in the Street, and it constitutes an important financial landmark, for the day that marked the beginning of the great decline in the prestige and power of Wall Street over national affairs.”
– Elliot Bell, Reporter for the New York Times
October 24th – This Day in Stock Market History
October 24th, 1907 – J.P. Morgan & Co. helps to avert a national crisis by assembling $25 million (Equal to about $670 million in today’s dollars) to keep certain New York banks and trust companies solvent.
The day began with continued panic as more and more banks and trusts were failing. The Panic of 1907 had begun October 15th, 1907 after Fredick Heinze’s failed attempt to corner the shares of United Copper caused the stock price to fall from 60 to 10. Panic spread into many other companies, most notably Westinghouse, whose shares fell from 103 to 25 in a period of 2 days.
Now the crisis began to hurt brokers and even the New York Stock Exchange. Upon noting panic conditions at the market’s open, NYSE president R.H. Thomas rushed to J.P Morgan’s office and explained that they needed $25 million in 15 minutes or brokers and banks would begin to fail. Morgan called a meeting with many bank presidents and had $27 million ready to be deposited in less than 5 minutes.
The actions would get New York and Morgan through the weekend, but one more round of panic would still in store before the panic of 1907 passed, which started 4 days later.
Source: Panic on Wall Street: A History of America’s Financial Disasters
October 24th, 1929 – After falling 6.33% the day before, stocks break lower still on immense volume. By 1:30 pm the ticker tape is 2 hours behind, by the market close the tape is 4 hours and 8 minutes behind. Stock close the day down 2.1%, and are down roughly 20% from their September 3rd highs, and newspapers and bankers describe the market as “cheap”.
The markets would fall for another 2 and a half years.
Source: Eyewitness to Wall Street: 400 Years of Dreamers, Schemers, Busts and Booms
Investors remained optimistic as stocks declined roughly 20% between September 1929 and late October 1929. After a couple quiet days, the market would return to panic just a few days later as the market crashes during “Black Monday” October 28th, 1929 and “Black Tuesday” October 29th, 1929.
October 24th, 2008 – On this day as well, the VIX hits a record high at the time of 89.53 as financial crisis intensifies.
Dow Jones Industrial Average opens the day “limit down”, as future markets circuit breakers trip after a drop of 550 points.
VIX chart during 2007 – 2009:
Although the market would decline for another few months before reaching bottom in March 2009, this day in history represents the height of the “panic” conditions as measured by the VIX.
The Dow would close the day off its lows, down “only” 412 points, about 4.5%.
Best October 24th in Dow Jones Industrial Average History
1930 – Up 3.72%, 6.99 points.
Worst October 24th in Dow Jones Industrial Average History
2008 – Down 4.47%, 412.30 points.
Read of the Day
The great depression wiped out thousands of investors. One of those was Fred Schwed Jr., who would write the book Where Are the Customers’ Yachts?: or A Good Hard Look at Wall Street
The book is a critical yet hilarious look at the state of Wall Street that is as applicable today as it was when it was originally published in 1940. The latest edition has a forward by Jason Zweig:
“As you will learn again and again as your read his little masterpiece, Fred Schwed shares the basic attributes of all great American humorists…a passion for ideas, a keen sense of justice, and outrage that the world is the way it is instead of the way it should be.”
Go To Next Day: October 25th, 1923 – German prints 120,000 trillion marks on this day alone->
