"Noooooo! Make it go back up!"

Top 6 and a Half Stock Market Crashes

April 19 by Ben Brown

Not all that glitters is gold, folks. In no particular order, here are some of the biggest stock market crashes in history. They can be devastating if you find yourself on the wrong side of them. But hey, if you’re going to build a Jenga tower, one day it’s gonna fall!

stock market crashes panic

 6 ½. The Tulip Bubble

Since BUX is based here in Amsterdam, I think we can include this one. Don’t be charmed by its sweet name, The Tulip Bubble caused a ton of damage. So what happened? Let me take you back to the 1600s where the price of a tulip bulb (yes, the flower) cost more than a house. People chased the most beautiful colours and exotic bulbs. It became a status symbol, but things got out of hand. Some rare bulbs were exchanged for mansions(!) Eventually, people stopped buying them, and the price crashed.

 6. The 9/11 Attack

On that fateful September morning, Bin Laden didn’t just bring down the Twin Towers, he brought down the US stock market too.

The market shut down for a week to prevent a collapse, and the Federal Reserve pumped $100 billion in liquidity into the banks to avoid a financial crisis. The price of gold, oil and gas rose, and the dollar fell against the euro, sterling and the yen.

And if you love conspiracy theories, check this out. United Airlines and American Airlines, the two companies involved in the attacks, had more than 25% of their shares traded in the runup to the attack. Same with Morgan Stanley, Bank of America and Citigroup. Coincidence??? … Yeah, probably.

A month and a half after the attack, markets recovered the loss, and returned to normal.

 5. Greek Tragedy

The Greek Finance Minister had some friendly advice for Angela Merkel during the Greek debt crisis: “My proposal is that Greece should simply announce that it is defaulting … and stick the finger to Germany and say ‘you can now solve this problem by yourself’”.

stock market crash middle finger

We have a suspicion that the relationship between Greece and Germany is one of love-hate!

Germany pointed the finger right back at Greece (as well as Spain, Portugal, Ireland and Cyprus) and accused them of causing a huge crisis in the European Union. It’s a bit like Germany went into a bar and bought all the drinks. But Greece drank way more than Germany. (Which is pretty unlikely – have you seen Oktoberbest? But you see what I mean).

Of course, some economists reckon it’s the euro itself that’s the problem, and the lack of a fiscal union, that caused all the trouble.

Due to the crisis, the Athens stock exchange was closed for five days to save the banks from collapse. They’d already lost 20% of their value, and dragged down the major European stock markets with them. The European Union had to come in and bail them out, to the tune of £230 billion (and counting).

 4. Brexit

In May 2016, Britain turned the gun on Europe and pulled the trigger. For better or worse? We’re yet to find out. What we do know is that on the day of the result, the stock market took a beating.

stock market crashes Brexit

The vote caused the single biggest loss on the worldwide market in one day. Total losses that day were estimated at $2 trillion. (That’s $2,000,000,000,000,000,000, by the way).

The value of the British pound crashed to a thirty-year low and still hasn’t recovered. It it keeps going at this rate, it might be worth less than a euro.

 3. The Dot-Com Bubble

Novelties always attract attention. But trends disappear as fast they emerge. Is anyone still playing Pokemon Go, for example? I rest my case.

The Dot Com bubble happened between 1997 and 2001. The rise of a few internet companies caused investors to blow their load all over tech stocks. They all had big expectations of this wild new industry, and the western stock markets drove higher.

stock market crashes dot com bubble

You already know how this story ends… Many companies suffered spectacular bankruptcies. The NASDAQ index (which predominantly measures technology stocks) went from 5,000 points to just 1,300 in less than two years.

During this period, more than 4,800 internet companies crumbled. Some companies, like pets.com and Webvan disappeared completely.

However, some companies recovered and regained their value. Amazon shares crashed from $107 to $7 when the bubble burst. But today, shares are priced well over $840. There were other lucky winners from the Dot Com bubble too. Mark Cuban, current owner of the Dallas Mavericks, for example, sold his company, Broadcast.com to Yahoo for $5.9 billion right at the height of the boom. Lucky bastard.

 2. The 2008 Financial Crisis

If you listen closely, you can hear the faint sobs of bankers around the world. Yep, the scars from the 2008 financial crisis are still hanging over us today with some banks struggling to get back on their feet (yeah, I’m looking at you, Royal Bank of Scotland).

The collapse of the banking sector caused the biggest economic disaster since The Great Depression. But what exactly happened?

Well, you’ve probably heard the phrase “sub-prime mortgage crisis” and nodded your head like you know what it means… Basically, banks were handing out mortgages to people who definitely shouldn’t have a mortgage. When people couldn’t pay back their loans, the whole system collapsed.

In the UK, the banks were bailed out to the tune of £850 billion, and the shockwaves are still being felt today.

 1. The Wall Street Crash of ‘29

It was a disaster so bad that bankers were throwing themselves out of windows. The fall began on the infamous Black Thursday, but the worst selloff happened five days later on Black Tuesday.

After World War I, the United States achieved a state of fantastic industrial development. The companies were shitting money, and everyone wanted a piece. Until it all went wrong. The sudden stock market crash kick-started America’s longest ever period of decline, The Great Depression. It ended up sinking many families and small businesses after 4,200 banks went belly-up.

The Great Depression eventually sparked a global recession, leaving four million unemployed in the UK and six million in Germany.

Written by

Ben Brown

Ben is one of our writers on the ground in London. By day he writes sensible news stories for The Huffington Post. By night, he injects fierce wit into the stock market at BUX.

All posts
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.