One was the stock market crash of October 19, 1987. I had received a degree in finance a year before and was working for a finance company. I was a year from entering the Graduate School of Business at the University of Chicago and a hoping for a career on Wall Street.
1987 was the year President Ronald Reagan appointed Alan Greenspan as the new Chairman of the Federal Reserve. In my mind, as a student of economics and finance, it seemed impossible to replace the towering Paul Volcker who in the early 80s had reigned in the worst unemployment and inflation since the Depression.
Greenspan was tested immediately as he faced the largest stock market crash since the crash of 1929. The Dow dropped 508 points and 22% -- only 69 days into Greenspan's tenure. On day after Black Monday, Greenspan signaled the Fed's commitment to keep financial institutions afloat pledging "to serve as a source of liquidity to support the economic and financial system." Following the crash, the Fed injected roughly $6 billion dollars a day into the economy.
Journalist and author Peter Hartcher wrote,
“The challenge that came within a couple of months was the black Monday Stock Exchange crash of '87. When he handled that flawlessly he became enshrined instantly as a Wall Street hero and national hero.”
