In 1987, a triple-digit-point stock market drop was huge
Frenzied selloff at TSE drew in curious spectators on Black Monday
Before last week's massive stock market sell-off due to fears about the economic impact of COVID-19, Canada had rarely seen anything like it.
According to CBC News, last Thursday's drop of 1,761 points on the S&P/TSX Composite Index represented a 12 per cent decline, eclipsing the previous record that was set in October 1987.
The 1987 collapse wasn't caused by a worldwide pandemic, however.
"The American trade and budget deficits still remain to be solved," said Robert Scully of CBC's business program Venture on Oct. 25, 1987, a few days after what became known as Black Monday.
$47 billion 'wiped out'
"As $47 billion worth of stock were wiped out on the Toronto Stock Exchange, so were a lot of theories about the market," said reporter Rae Hull.
According to the Toronto Star on Oct. 20, 1987, the day after the crash, the Toronto index had dropped by 407 points, or 11.32 per cent.
At the time, the Star reported that "most economists" said the crash was not going to bring about economic ruin of a scale comparable to the Great Depression of the 1930s.
The CBC camera captured traders on the floor at the TSE, and one man was heard shouting "I want to sell too!"
"All eyes were glued to screens that told stories no one could believe," said Hull.
Tom Green, a broker with Burns Fry, described the situation as "scary," noting it would take "several days" before anyone knew what the effects would be.
Even the gold market, which was usually expected to go up in value as stocks dived, wasn't behaving as expected.
"We are prepared for anything at this point," said Ken Hagerman, who was vice president of a company called Central Canada.
'This is exciting'
The "frenzy" of trading even drew in curious spectators.
"My gut feeling was, this is exciting. This is a page in history, and we're part of it," said one such observer wearing a suit and tie.
Somewhere described on Venture only as "rural Ontario," an investment club was meeting to figure out how they should react to the sell-off.
"How far do you think interest rates will be pushed down?" asked one member.
"I wish I knew!" came the response.
Another side effect of the crash was being felt in the real estate market, said Hull. Panicked clients were calling agent Eugene Palermo almost right away.
"They were saying they couldn't buy a house because their down payment had been lost in the stock market," said Palermo.
Back at the stock exchange, Green said he'd be finishing out the week by taking his staff out for a drink.
"It's one for the nation's history books, no question," said Hull. "The week we'll all remember. The one that many would like to forget."