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30 Years After 'Black Monday,' Has Wall Street Learned Its Lesson?

"A First-Class Catastrophe," by Diana B. Henriques. (Robin Lubbock/WBUR)

On Oct. 19, 1987, the stock market fell 22.6 percent, the largest single-day loss in Wall Street history. Though the day became known as “Black Monday,” many of the details of what happened have been lost to history.

New York Times financial reporter Diana Henriques (@dianabhenriques) examines what led up to Black Monday and what lessons can be learned from it in “A First-Class Catastrophe: The Road to Black Monday, the Worst Day In Wall Street History.” She joins Here & Now‘s Jeremy Hobson to talk about the book.

Book Excerpt: ‘A First-Class Catastrophe’

By Diana Henriques

He was a towering six foot seven, his round, balding head perpetually wreathed in cigar smoke. Paul A. Volcker, the chairman of the Federal Reserve System, was formidable even when he was cheerful. On Wednesday afternoon, March 26, 1980, he was furious.

Volcker, in office for barely seven months, had been pulled out of a meeting by a frantic message from Harry Jacobs, the chairman of Bache Halsey Stuart Shields, the second-largest brokerage firm on Wall Street. The Fed had almost no authority over brokerage firms, but Jacobs said he thought “it was in the national interest” that he alert Volcker to a crisis in the silver market—a market over which the Fed also had virtually no authority.

Jacobs’s news was alarming. Silver prices were plummeting, and two of the firm’s biggest customers, a pair of billionaire brothers in Texas named William Herbert and Nelson Bunker Hunt, had told him the

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