Monday Musings 57

Can a brain return to its “native state” after a half-century? Before I discovered sports at the age of 8 or 9, I read about cars, science, history, countries. Some of my favorite books were just compilations of data, such as information on countries.

This morning, my “bathroom reading” was the 2008 edition of the CIA World Factbook, a compendium of facts and figures about nations, dependencies, etc. Sports books have virtually ceased to be “throne reading material.”

Most people I know, even some of those whom I have known for decades, seem to be in denial that I have reverted to my “native state.” As I have written here before, I came relatively late to the sports world. For the most part, my male neighbors and classmates were following sports by the time they were 5 or 6.

I can assure you that I am not secretly following sports, but pretending not to. I really have little to no interest in sports, anymore. If other people don’t understand or don’t approve, that’s their problem.

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On this day in 1987, also a Monday, world stock markets experienced a pronounced decline. The Dow Jones Industrial Average fell by a frightening 22.6%. (An equivalent percentage fall today would be almost 6,500 points on the Dow.) The S&P 500 declined by 20.4%. Some “pundits” also believed the decline was unexpected, although the Dow had fallen a total of 10% over the previous three trading days.

Because (or in spite) of action taken by the US Federal Reserve, the stock market rallied strongly on Tuesday the 20th and Thursday the 22nd. While it was almost two years (September, 1989) before the Dow reached its pre-crash levels, for calendar year 1987 it actually eked out a small 0.6% gain.

Because of “Black Monday” equity markets have instituted circuit breakers or trading curbs that temporarily shut down trading in the wake of large price declines. Based upon the idea that a cooling off period would help dissipate panic selling, these mandatory market shutdowns are triggered whenever a large pre-defined market decline occurs during the trading day.

As of the close of trading on Friday the 16th of this year, the Dow was 16.4 times higher than its close on October 19th, 1987. The S&P 500 was 15.5 times higher. A hypothetical investment worth $10,000 in an S&P “index” instrument at the close of trading on “Black Monday” would have a value of about $155,000 today, not counting dividends. If one had removed 40% from that S&P investment before trading resumed the next day, the remaining $6,000 would be worth about $93,000 today.

Unlike the stock market crash of 1929 that precipitated the Great Depression, the US economy did not enter a recession until 1990-91. US GDP grew by 3.5% in 1987 and 4.2% in 1988.

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I assume (everyone knows what happens when one assumes) that by late October, 1987 the 1988 model year cars were available. Here is one of interest to me:

 

See the source image

 

From Car Gurus (crossing my fingers the picture link doesn’t break) a picture of a 1988 Corvette. Chevrolet built 22,789 Corvettes for model year 1988, of which 15,382 were coupes like the car shown here.

The base MSRP for the 1988 Corvette coupe was $29,489; the convertible base MSRP was $34,820. Except for the 125 Callaway-installed twin-turbo cars, costing an additional $25,895, all ’88 Vettes had either 240 or 245 HP. (The Callaway had 382 HP and 562 LB-FT of torque.)

1988 represented the 35th anniversary of the introduction of the Corvette and Chevrolet marked the occasion with an anniversary edition car that was only available as a coupe. The differences in the anniversary edition were solely in appearance; 2,050 of these cars were sold.

In a world where my net worth was 10 or 20 times more than it is today, I might have a C2 restomod AND a C4 restomod. Too bad I haven’t been invested in the stock market since the mid-1980s.

 

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