Black Monday

Submission 5,291

Overview

Black Monday is a term used to describe major historical events that occurred on the first day of a seven-day week, especially ones that carry negative connotations or otherwise undesirable consequences. In business jargon, the term is primarily associated with a stock market crash triggered by a momentary financial collapse within a single market and leads to a chain reaction of massive declines in stock prices across the rest of the world. It is not to be confused with Black Friday, an annual shopping sale event observed on the day after Thanksgiving in North America.

Background

The coinage of "Black Monday" is attributed to the U.S. congressman John Bell Williams (D-Mississippi), who used the term to to protest the U.S. Supreme Court's decision in Brown v. Board of Education, a landmark case in which state-level segregation of public schools for black and white students was declared to be unconstitutional, on May 17th, 1954. However, it was introduced to the general public on a much larger scale on October 19th, 1987 to describe the worldwide stock market crash that started in Hong Kong and spread to the rest of Asian and European Markets, before eventually impacting the economy of the United States; within the same trading day, The Dow Jones Industrial Average (DJIA) fell exactly 508 points to 1,738.74 (22.61%), which remains the largest one-day percentage decline in the DJIA to this date.

The terms Black Monday and Black Tuesday are also respectively applied to October 28 and October 29, 1929, which occurred after Black Thursday on October 24, which started the Stock Market Crash of 1929.

Developments

Black Monday 2011

Entering the 21st century, the term became even more closely associated with major financial collapses through its usage on multiple occasions, most notably the sudden decline in asset values of global stock markets on August 8th, 2011, following the Standard & Poor's unprecedented credit rating downgrade of the U.S. sovereign debt from AAA ("risk free") to AA+ on the preceding Friday. By market close, the Dow Jones Industrial Average lost 634.76 points (-5.55%) to close at 10,809.85, making it the 6th largest drop of the index in history.

Black Monday 2015

The second major "Black Monday" in the global stock market occurred on August 24th, 2015, when the Shanghai Stock Exchange (SSE) Composite Index suffered a drastic decline of 8.45%, the booming economy's worst decline in a single day in eight years.