Stock market crashes had occurred in the financial market since the very beginning and in every generation (Sornette, 2003a). “Greed, hubris and systemic fluctuations have given us the Tulip Mania, the South Sea bubble, the land booms in the 1920s and 1980s, the U.S. stock market and great crash in 1929, the October 1987 crash, to name just a few of the hundreds of ready examples“ (Sornette, 2003a, p. 7.).
This essay will compare and contrast the last three major stock market crashes in 1987, 2000 and 2007. To do this, the essay will pay special emphasis on the causes of the three crashes. From there the essay will draw out the similarities and differences and will answer the question if boom and bust can be predicted.
Content
2 INTRODUCTION
3 STOCK MARKET CRASH IN 1987 - BLACK MONDAY
3.1 CAUSES
4 THE STOCK MARKET CRASH IN 2000 - .COM BUBBLE
4.1 CAUSES
5 THE STOCK MARKET CRASH IN 2007 - THE MORTGAGE CRISIS
5.1 CAUSES
6 COMPARISON AND CONTRAST
6.1 COMPARISON
6.2 CONTRAST
7 CONCLUSION - CAN BOOM AND BUST BE PREDICTED?
8 BIBLIOGRAPHY
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