As mentioned earlier, there was a fairly long prelude to Black Monday, but most investors were oblivious and not concerned. We don’t have similar fundamental conditions now, but we aren’t free of worry. There is North Korea, a possible Trump trade war, a stalled Congress, and something we can’t see coming.
1987 and 2017 do share one thing — complacency. Active buy and sell markets indicate a healthy amount of caution mixed in with optimism. There is little of that today. The points of remembering a day like Black Monday is not to make us fearful, just watchful.
Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.