The New York Stock Exchange closed its trading floors on Monday October 29, 2012 after Mayor Bloomberg told folks in New York on Sunday that the transit system, subway would close at 7 PM and perhaps for a couple of days. This included the underground traffic tunnels and mandatory evacuations were required for low-elevation areas were issued due to Hurricane Sandy with an expected storm surge of 11-feet, plus 75 mph winds. Okay so, let’s talk about the NYSE closure due to weather, something that by the way hasn’t happened in 30-years.
Now then, the other day on October 19, 2012 the stock market had a negative 205.43 day on the DOW, which happened to be the anniversary of the 1987 crash, also known as Black Monday (October 19, 1987). Well, consider this, the New York Times noted in their online emailed edition that “On This Day” in history; Oct. 29, 1929, stock prices collapsed on the New York Stock Exchange amid panic selling. Thousands of investors were wiped out. On the front page of the New York Times on that dreadful day of 1929 there was an article titled;
“Stock Market Collapse in 16,410,030-Share Day but Rally At Close Cheers Brokers; Bankers Optimistic to Continue Aid”
Okay so, I guess knowing these two coinciding patterns, that this might be a very wise day to close the NYSE with or without a “historic storm” some 850 miles wide, which is Hurricane Sandy, which now combining as it hits the shore with a cold front. You know what happens when you mix wicked cold air with very warm air from a Hurricane let’s say. You get amazing thunder and lightning storms and massive amounts of rain, plus all that energy and moisture from the Hurricane, ouch! And consider that this is right at the tail end of the election season, where Americans will be deciding over whether to continue forward with socialism or pull back and stay with free-market capitalism.
With corporate earnings coming in somewhat mixed and questionable perhaps even politically inclined economic data which seems somewhat inaccurate, investors are sketchy. Throw in the recent volatility, high frequency trading algorithms making hay, and everyone on hold for the election, you can bet that it is far safer to prevent a d?j? vu anniversary stock market hit or pull back on the NYSE. Indeed, I just got done reading “Crashes, Crisis, And Calamities – How We Can Use Science to Read the Early-Warning Signs” by Len Fisher.
Now then, I’d say this perfect storm (Hurricane Sandy + Massive Cold Front + Another On Its Way, with Gale Force Winds) plus the coincidence of political heat, cold corporate earnings on the anniversary of the October 29, 1929 stock market crash would be enough science for me to wish to perhaps, let the stock market skip a day, because this whole patterns just doesn’t look right to me. Seriously, think about it.
Additional Reading Recommended:
1.) “There Was a Bubble in the 1929 Stock Market Crash” by Peter Rappoport and Eugene N. White in Journal of Economic History, Volume 53, Issue 3 (September 1993), 549-574.
2.) “The Stock Market Boom and Accident of 1929 Revised” by Eugene N. White also in Journal of Economic Perspectives, Volume 4, Number 2 (Spring 1990), pages 67-83.