Wall Street Biggest Crashes

Financial crisis of 2007-2008

This was the biggest crisis of recent times and what started off in Wall Street soon spread around the globe. There was hardly a market that was untouched by the crisis. Here’s what happened – failures of big financial institutions in the US, due largely to exposure of securities of packaged subprime loans and credit default swaps issued to insure these loans, quickly evolved into a global crisis. A crisis that led to failures of banks in Europe and steep declines in the value equities and commodities globally.

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Later, President George Bush signed the Emergency Economic Stabilization Act, building a Troubled Asset Relief Program (TARP) to acquire falling bank assets. All in all, the crisis had disastrous effects on the global economy and trading around the world.

2010 Flash Crash

The Dow Jones Industrial Average (DJIA) suffered its worst intra-day point loss, falling almost 1 000 points before it attempted recovery.

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This was a trillion-dollar stock market crash which lasted 36 minutes. The market rebounded rapidly afterward, but the shockwave had long-lasting effects on trading dynamics. A report later described it as one of the most turbulent periods in the history of financial markets, certainly of the NYSE, but of markets generally the world over. It is interesting to note that flash crashes happen quite regularly, but measures installed after such events usually have little effect on preventing them later.

2011 stock markets fall

This was the rapid, steep fall in stock prices which occurred in August 2011 in stock exchanges across the US, Middle East, Europe, and Asia.

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It was primarily due to fears of contagion of the European sovereign debt crisis to Spain and Italy, as well as a focus on France’s AAA rating. Standard & Poor’s downgraded America’s credit rating for the first time, and Moody’s also warned of a potential downgrade. Extreme volatility of stock market indexes on the NYSE lasted the rest of the year.

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