Word: indexes
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Dates: during 1980-1989
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...Index Futures and Options. These so-called derivative stock-market products are based on baskets of securities that can be bought and sold in the future. They are primarily designed to let investors protect their portfolios against sudden market changes, especially in a form of trading known as portfolio insurance. But since the crash, they have been called speculative instruments that can whipsaw the market as a whole. Many experts argue that Black Monday's cataclysmic spiral was triggered by a panic sale of index futures by managers trying to shore up their holdings...
Since then, the Chicago Mercantile Exchange has imposed a limit on the amount that an index futures contract can rise or fall in a single day. The Merc has also increased the amount of cash, or margin, that speculators must put on deposit. Congressional investigators are talking about additional safeguards to limit the number of futures contracts a broker could execute in a day. But at hearings last week in Washington, Merc President William Brodsky argued that the sale of index futures had a stabilizing effect on Black Monday. Without that escape valve, Brodsky suggested, the Dow would have fallen...
...budget summiteers could also save an estimated $24 billion in the next three years by freezing the annual cost-of-living adjustments for Social Security payments. That is not likely: just last year, when the Consumer Price Index failed to rise by 3%, the amount necessary to trigger a cost-of-living increase, Congress went ahead and voted an $8.6 billion hike anyway...
...world financial markets quite like the October crash. Last week stock exchanges around the globe continued alternately to plummet and jump upward in violent imitation of the spasms on the New York Big Board. In some cases, the volatility was much worse. In Tokyo, for example, the Nikkei share index dived 4% on Monday, but in a week of wild slides and surges finally closed with a gain of .1%. In London the Financial Times index tumbled 6% on the opening day of trading but struggled back and ended the week with a loss of 2%. The continued decline cast...
Tokyo traders called it the week of haran, or turbulence. On Monday the value of the 225-stock Nikkei share index exchange fell 1,096 points, the third biggest loss ever. But after the slide, the Nikkei climbed by 731.15 points on Friday, its third biggest rise ever, and an additional 563.87 points on Saturday. Controlling the effects of the second-week crash posed a substantial challenge for the lame-duck government of Prime Minister Yasuhiro Nakasone, who hands over power on Nov. 6 to his successor, Noboru Takeshita. Following Monday's precipitous slump, the Japanese Finance Ministry quietly pressured...