A First-Class Catastrophe (Amazon,) is about Black Monday – October 19, 1987 – the worst day in Wall Street history when the market fell 22.6%. The author, Diana B. Henriques, presents a thoroughly researched, yet revetting account of why it happened, the key players and why it will happen again.
The actual lesson is that human beings do not cope well in a crisis when speed, complexity, secrecy, and fear all batter our emotions at the same time. We panic — or, most of us do. We are not the cool, rational investors postulated in academic theories, and we never will be.
The problem is that US regulators continue to approach the markets in a piecemeal manner that make wholesome regulations impossible to achieve. As long as they are more focused on protecting their turf, the markets are stuck in a doom loop.
Recommendation: Worth a read.