Word: crashing
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Dates: during 1980-1989
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...crash's aftermath, each camp has recommended that the other change its ways. So far, except for mostly symbolic gestures, neither is budging. Says George Ball, chairman of Prudential-Bache Securities: "It's almost like a game of chicken. Nobody wants to be the first to give in." Even the two separate federal regulatory agencies that oversee the markets are at a standoff. If any new safeguards need to be imposed, Congress may have to take the initiative by default...
Among the six major investigations of the crash, three concluded that computer-driven index arbitrage and a related strategy known as portfolio insurance were at least partly to blame for the speed and severity of the 508- point drop in the Dow Jones industrial average. The Brady commission, which the Reagan Administration appointed, contended in its report last January that Chicago's futures markets have gained inordinate leverage over New York because the two marketplaces play by such vastly different rules and fail to monitor their complex interactions...
...Brady panel recommended drastic reform that would have curbed Chicago's latitude. Last week, however, a White House working group on the crash delivered a quite different report, one that essentially exonerated the futures markets. The group, which included Treasury Secretary James Baker and Federal Reserve Chairman Alan Greenspan, recommended only one significant safeguard: a so-called circuit breaker that would interrupt trading in most U.S. financial markets for one hour if the Dow fell 250 points from the | previous day's close and for two hours if it dropped 400 points. In congressional testimony later in the week, Greenspan...
Investors are registering their disapproval in droves. In a survey conducted earlier last week by Sindlinger & Co., a marketing-research firm, just 4% of the households polled said they planned to buy stock, compared with 15% just after the crash in October. Fear of the volatility often attributed to program trading was the second most often mentioned reason for avoiding the market, after disillusionment about insider trading. Individual investors have apparently developed a belief that the stock-market game is fixed in favor of the big players. Says Arthur Levitt, chairman of the American Stock Exchange: "It's a national...
...move on the ground that they would no longer have their own advocate. At present, the CFTC sticks up for the Chicago markets whenever the SEC tries to fence them in. Earlier this month the CFTC approved two new forms of stock-index contracts -- the first authorized since the crash -- bringing the total number to 18. The Chicago Merc hopes to get approval soon for a futures contract to be based on the Tokyo exchange's Nikkei 225 stock index...