Heat of a mar­ket crash-and-burn still felt 30 years on

The Weekend Australian - - THE NATION - Cameron Stewart’s re­port on Oc­to­ber 21, 1987 CAMERON STEWART Cameron Stewart is now The Aus­tralian’s Wash­ing­ton cor­re­spon­dent and US con­trib­u­tor for Sky News Aus­tralia.

On Black Tues­day, Oc­to­ber 20, 1987, I ac­ci­den­tally had the best job on The Aus­tralian. I was the pa­per’s share­mar­ket re­porter, a usu­ally mun­dane daily round of­ten given to cadet jour­nal­ists like my­self to help us learn about busi­ness re­port­ing.

Then came the crash, and noth­ing was quite the same again. On that day Aus­tralia woke to the stun­ning news that overnight Wall Street had suf­fered the largest one-day loss in its his­tory.

I grabbed my note­book and rushed down to Stock Ex­change House on Mel­bourne’s Collins Street, where crowds were gath­er­ing to wit­ness the blood­shed that was about to un­fold.

I walked on to the trad­ing floor as I al­ways did, but on this day it felt like an­other world. The cocky, larrikin trad­ing floor I knew was no more.

It was as if a wave of elec­tric­ity were rip­pling across the Mel­bourne stock ex­change in ner­vous an­tic­i­pa­tion of what was to come. A sea of stock­bro­kers and their as­sis­tants stood sternly be­fore me, dressed in the Wall Street-style uni­forms of the 1980s — white shirts and skinny black ties, or loud striped shirts and pants held up by sus­penders. They all knew it would be bad, but how bad?

Trad­ing be­gan with a col­lec­tive roar as sell or­ders rang out across the floor and the “chalkies” on the ledges above strug­gled to keep pace as they scrib­bled ever-lower prices for the stocks on their boards.

Those on the floor were prob­a­bly too busy to soak up the sig­nif­i­cance of the mo­ment, but the truth was that the Aus­tralian share­mar­ket on Black Tues­day was dead on ar­rival. It opened an as­ton­ish­ing 25 per cent lower than the pre­vi­ous day’s close be­cause of the car­nage on Wall Street hours ear­lier.

I re­mem­ber star­ing around the room, look­ing at the may­hem. I shame­fully ad­mit I was more pre­oc­cu­pied at that mo­ment with how I would write the big­gest story of my very short ca­reer than I was about what it meant for Aus­tralia and the world. That same month, Oc­to­ber 1987, Tom Wolfe would pub­lish Bon­fire of the Van­i­ties, de­scrib­ing the “Masters of the Uni­verse” of Wall Street. On that day Aus­tralia’s Masters of the Uni­verse were stand­ing right be­fore me, watch­ing their uni­verse ex­plode like the Big Bang in front of their eyes.

The pic­tures in the pa­per the next day would show some traders with their heads buried in their hands as the mar­ket plunged, but mostly I re­mem­ber them as just look­ing stunned as they be­came front-row wit­nesses to a mo­ment in his­tory.

Barely a month ear­lier the Aus­tralian mar­ket had hit yet an­other record high, crown­ing many months of un­prece­dented leaps and con­firm­ing it as one of the great bull mar­kets of any era.

As I tried to chron­i­cle its re­lent­less rise in my daily re­ports for The Aus­tralian I ran out of words to de­scribe it — soar, jump, surge, climb, rocket, boom. The rise in the All Ordinaries was so re­lent­less that I con­sciously ro­tated th­ese words between my re­ports so they would not all seem the same.

Yet now it was crum­bling in front of my eyes. Rome was burn­ing.

Per­haps the bro­kers and traders on the floor that day had al­ready guessed the con­se­quence of this, the worst day in Aus­tralia’s share­mar­ket his­tory.

Within six months many of them had lost their jobs, with their broking firms clos­ing or slash­ing costs to stay afloat.

I re­call the sur­real feel­ing of stand­ing on the floor, try­ing to keep track of the blue-chip stock prices I re­ported on ev­ery day. Some were trad­ing at a quar­ter of the price they had been 24 hours ear­lier. Smaller stocks didn’t trade at all be­cause there was zero de­mand.

Com­puter trad­ing, a new no­tion in those days, helped push the mar­ket lower more quickly as price floor af­ter price floor was breached by au­to­matic com­puter sell or­ders.

Only later did it dawn on me

‘Wave af­ter wave of panic-sell­ing trig­gered the worst day in Aus­tralian share­mar­ket his­tory yes­ter­day as in­vestors slashed an un­prece­dented $55 bil­lion off the value of stocks amid a world­wide stock­mar­ket crash’ THE FIRST PARA­GRAPH OF CAMERON STEWART’S RE­PORT

how this mo­ment not only changed Aus­tralia, but the pro­fes­sion I was try­ing to learn.

Busi­ness jour­nal­ism at the height of the 1980s stock­mar­ket boom re­flected the ex­cesses of that era. There were long, liq­uid lunches and gilded jun­kets for jour­nal­ists, ea­gerly paid for by chief ex­ec­u­tives with deep pock­ets, blue-sky dreams and a de­sire for favourable cov­er­age. Our sto­ries were about grand ac­qui­si­tions, floats, em­pires and plans for to­mor­row.

Af­ter the crash, those who once hosted the long lunches be­came the news for all the wrong rea­sons. Our sto­ries were now about bank­rupt­cies, clo­sures, col­lapses and some­times jail.

But none of this reg­is­tered as I left the chaos of the trad­ing floor and walked back to The Aus­tralian’s then of­fice in La Trobe Street to file my re­port. All I could think of was what my open­ing para­graph might be for such a story.

It was noth­ing spe­cial but the fact that I still re­mem­ber that para­graph to­day, word for word, 30 years on, tells me that maybe, deep in­side, we all knew that the world had changed on that day:

“Wave af­ter wave of pan­ic­selling trig­gered the worst day in Aus­tralian share­mar­ket his­tory yes­ter­day as in­vestors slashed an un­prece­dented $55 bil­lion off the value of stocks amid a world­wide stock­mar­ket crash.”

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