Word: crashing
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Dates: during 1980-1989
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Many stockbrokers are nervous for another reason: the wrath of their clients. "I want to strangle my broker," says Manhattan Insurance Agent Matthew Costa. "I wanted to sell everything on the Friday before the crash, but she told me I had good stocks and should hold on. Now she keeps giving me excuses why she can't meet me for a few days." While Costa's threat was figurative, customer anger seemed all too real last week after an investor who lost nearly his entire multimillion-dollar portfolio walked into a Merrill Lynch outlet in Miami with a .357 magnum...
Signs are increasing that the crash is discouraging consumers across the U.S. as well. While polls immediately afterward showed only a modest amount of alarm, later surveys indicated that the Wall Street shock was starting to register. According to a Wall Street Journal/NBC News poll of 2,394 Americans last week, nearly two out of three (64%) say a major economic downturn is very or somewhat likely in the next twelve months. "Since about 19% of total retail sales occur during November and December, the plunge could not have come at a more inopportune time," says Robert Chandross, chief economist...
...eventually there are no good policy choices. That was a favorite saying of the late Arthur Burns when he piloted the Federal Reserve Board through the inflation-ridden 1970s, and it applies with equal force to the dilemmas facing Government policymakers in the wake of the stock market's Crash of '87. A babble of conflicting voices warns of peril in almost any course the economic managers might take to reduce the budget and trade deficits and force the country to live within its means. And those warnings cannot be lightly dismissed. There are in fact risks, magnified by years...
...help for it: the greatest risk of all would be to confirm investors' fears that U.S. economic policy will remain paralyzed by indecision and partisan bickering. That might bring on a still worse crash, a world financial crisis and a shattering global recession. Moreover, there does seem to be a way out. In outline: Start now a program to cut the budget deficit steadily and substantially through a mixture of spending cuts and, yes, tax increases. Cushion the blow to the American economy -- and there will be some blow -- by easing Federal Reserve monetary policy and allowing interest rates...
...Government spending would deepen any slump, because they would reduce the amount of money in consumers' hands. Some worriers go so far as to raise the ghost of Herbert Hoover, who slashed federal spending and persuaded Congress to raise income tax rates sharply in the wake of the 1929 Crash. Says University of Tennessee Economist Paul Davidson: "Cutting the deficit at this particular time would be the worst thing we could do. It would be Hooverism all over again. If the budget cuts proceed, we could slip into another Great Depression...