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