Since Pensions & Investments launched 40 years ago, there have been numerous market crises, but the one that stands out the most for P&I Online readers is the 2008 global financial crisis.
More than 78% of poll respondents selected the 2008 financial crisis as the most significant market crisis of the last 40 years. It got more votes than:
- the bear market of 1973-1974, which received 5% of the vote,
- Black Monday (Oct. 19, 1987), which received almost 8% of the vote,
- the dot-com tech wreck of 2001, which received about 6%, and
- the 2010 flash crash, which received 2%.
Barely registering among audience members was the 1997 Asian financial crisis, even though it led to the collapse of Long-Term Capital Management, which required a $3.6 billion bailout by investment banks to prevent an impact on U.S. markets.
However, the Long-Term Capital bailout pales in comparison to the bailouts of the 2008 financial crisis, which started with private bailouts like J.P. Morgan's acquisition of Bear Stearns and culminating with the U.S. government's bailout of the financial system through the Troubled Asset Relief Program. Although the original law allotted the U.S. Treasury $700 billion to stabilize the financial system, the figure was reduced to $475 billion and the eventual disbursements were $431 billion, according to the Congressional Budget Office.
The question was asked as part of P&I's 40th anniversary. See the full report.