Stock market crash

Stock market crash is a redirect to this article. For the US film drama, see Der Börsen-Crash .

Dow Jones crash in October 2008

A stock market crash (or stock market crash ) is an extreme drop in prices on the stock market . It lasts from a few days to a few weeks. During this time, sales dominate - mostly panic-like - which generate a large excess supply and thus lead to drastically falling prices.

Stock market crashes usually occur at the end of a speculative bubble . But also in the case of unexpected, negative events - e.g. B. the bankruptcy of Lehman Brothers  -, in extreme cases - z. B. the Flash Crash  - even without any messages. Then there can be a positive feedback : some market participants sell, which causes prices to fall. This also drives more participants to sell and the prices keep falling.

There is no clear definition of a stock market crash. In contrast to the bear market , prices fall faster and more suddenly, an expression of panic selling.

history

The course of the Dow Jones from July 1987 to January 1988, see Black Monday

Stock market crises up to the Great Depression

• On February 7, 1637, the first recorded collapse of a stock exchange took place: after many Dutch investors had bought tulip bulbs (or corresponding warrants ) at extremely high prices in anticipation of further price increases in response to the great tulip mania, the buyers finally stayed at the annual auction in Alkmaar off and prices fell 95 percent.
• In 1700, the Darién Society could no longer redeem its shares after the failure of its colonization project in Panama .
• Stock market crash in 1847, the banking crisis in France and England leading up to the revolutionary unrest of 1848.
• Black Friday of September 24th, 1869, triggered by gold speculation by entrepreneurs Jay Gould and James Fisk and countermeasures by the United States government
• On May 9, 1873, share prices on the Vienna Stock Exchange plummeted ( founders' crash ). Share prices also plummeted in Germany and the United States.
• On May 5, 1893, the economic crisis in the United States caused significant price losses on the New York Stock Exchange , which hit railroad stocks in particular.
• On March 13, 1907, prices on the New York Stock Exchange collapsed . Dried up money flows as a result of the Russo-Japanese War , the rebuilding of San Francisco after the great earthquake of 1906 and an over-expansion of some large railway companies are considered to be the causes . In addition, there was a very late harvest which caused problems for the farmers.
• The Black Friday on 13 May 1927 was the share index of the Reich Statistical Office on the Berlin Stock Exchange by 31.9 percent slump.
• The Black Thursday is valid on 24 October 1929 as one of the triggers of the global economic crisis .

Stock market crises after the collapse of the Bretton Woods system

• On October 19, 1987, the Dow Jones crashed by over 20 percent on Black Monday . The prices recovered within a year, however, after 15 months the Dow Jones was back to the level before the crash.
• From January 1990 to the end of September 1990, the Japanese stock market, measured by the Nikkei index, lost more than 40 percent of its value.
• On August 19, 1991, after the coup against the Soviet President Mikhail Gorbachev, the DAX lost 9.4 percent in one day.
• In March 2000 the dot-com bubble burst . The NASDAQ Composite Index fell in March 2000 from 5132 points to October 2002 by almost 80 percent to only around 1110 points.
• The terrorist attacks on September 11, 2001 resulted in a four-day trade disruption. The DAX lost around 8.5 percent that day. Immediately after the reopening, the Dow Jones index fell by a good seven percent.
• As part of the 2007 financial crisis , the Nikkei index fell 11.4 percent on October 16, recording the second-largest daily loss in the index's history. Individual funds, e.g. B. a flagship from Goldman Sachs , recorded even greater losses and revealed the dubiousness of the financial mathematical model used by declaring it as a 25 sigma event.
• As a result of the coronavirus , the DAX slumped on March 9, 2020 within one day from 11,550 (previous day's end) to 10,300 points by a good 10 percent. Shortly thereafter, on March 12, 2020, there was another price drop by a further 12% to 9,200 points. With a price drop of over 40% within a month, investors experienced the largest drop in the DAX in such a short time.

See also

• Suspension of trading
• Financial crisis
• Speculative bubble
• Behavioral Economics , Business Psychology
• Economic crisis
• Dead cat bounce
• Maid house boom

literature

• Beverly Rae Kimes: Pioneers, Engineers, and Scoundrels: The Dawn of the Automobile in America. Published by SAE (Society of Automotive Engineers) Permissions, Warrendale PA 2005, ISBN 0-7680-1431-X (English).

Web links

Wiktionary: Stock market crash  - explanations of meanings, word origins, synonyms, translations

Individual evidence

1. ↑ Kimes: Pioneers, Engineers, and Scoundrels (Hardcover), p. 221.
2. ^ Karl Erich Born: When Germany's banks crashed (II): Black Friday . In: Die Zeit , No. 14/1967
3. ↑ The Japan Crisis (1990). in: boerse.de , online , accessed on September 5, 2019
4. ↑ Dax Chronicle: Roller coaster ride in the shadow of terror. In: handelsblatt.com . October 4, 2001, archived from the original on January 25, 2013 ; accessed on September 4, 2018 . 
5. ↑ Kevin Dowd, John Cotter, Chris Humphrey, Margaret Woods: How Unlucky is 25-Sigma? (PDF; 77 kB) In: arXiv . March 24, 2008, accessed September 4, 2018 . 
6. ↑ Steffen Preißler: Buying shares despite Corona? What investors need to know now. In: Morgenpost.de. May 10, 2020, accessed May 25, 2020 . 
7. ↑ The losses since the beginning of the stock market crash in February now add up to over 5100 Dax points. In: fr.de. Frankfurter Rundschau, May 15, 2020, accessed on May 25, 2020 .