Era 03 · 1970s — 1990s

Cable TV & Bloomberg Terminal

Reaction speed

Minutes

Pulse cycle

2.5s

CNBC launched 1989. Bloomberg terminals hit floors in 1982. Financial commentators could move markets in real-time. The era of the unchecked prediction began.

Events in this era

Oct 19, 1987

Black Monday — First Televised Market Crash

Portfolio insurance programs, designed to hedge institutional equity exposure, issued automatic sell orders as prices fell. Those sell orders pushed prices lower, triggering more sells. Meanwhile, cable news carried the crash live into living rooms for the first time in history. The feedback loop between falling prices, algorithmic selling, and televised fear compressed a typical multi-day panic into a single trading session.

Dow −22.6% in single session

1998

LTCM Collapse

Long-Term Capital Management, a hedge fund run by two Nobel laureates and a former vice chair of the Fed, lost $4.6 billion in a few months on highly leveraged bets. Bloomberg terminals let every major trading desk see the deteriorating positions in near real time. The NY Fed organized a $3.6 billion private rescue consortium inside a week, because waiting longer would have risked cascading failures across the counterparty network.

Fed emergency bailout of $3.6B

Sep 16, 1992

Soros breaks the pound

George Soros's Quantum Fund bet $10 billion against sterling. The Bank of England raised rates twice in one day defending the ERM peg. Britain withdrew that evening. Soros made roughly a billion dollars in a single day.

GBP −15% vs DEM; UK exits ERM

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