I like Art Cashin. I used to read his morning column when I was a fresh faced broker at UBS. I remember him wearing a “Dow 10,000” hat that he first got as the Dow pushed over 10K on the day the Dow pushed below 10k in 2008. It was the tiniest of light rays in a dark time.
But old Art had seen nastiness before 2008.
Shortly after the opening, as it became clear that this would be a very special and very dangerous day, several NYSE directors met in Chairman Phelan’s office. They checked around the street to gauge any new trends in the selling pressure. They were also on the phone with the White House via former Sen. Howard Baker, who was White House chief of staff.
Meanwhile, back on the floor, the situation felt more unreal. Orders flowed in faster and faster and the tape ran later and later. (The tape was linear and the human eye can only recognize a certain number of symbols per second, 900 I think. To run faster than that would make the tape an unreadable blur. Traders can trade faster than the maximum reading speed — so the tape ran late). One broker said it was like a bizarre dream sequence — nothing seemed real.
In late morning there were signs that the markets might begin to stabilize. Then the newly appointed chairman of the Securities and Exchange Commission, David Ruder, was intercepted by reporters leaving a meeting at the Mayflower Hotel in Washington. Whatever they asked and whatever he said, it somehow was reported that the markets might have to be halted. Later, he would swear it was a typo but you can’t unring a bell. The fear of a halt sent buyers scurrying away. Stocks went into virtual freefall.
The interaction with the futures saw prices melt away. The Dow closed down 508 points. One specialist, who made too good a market, ran out of funds and the firm was sold to Merrill Lynch that very night. At watering hole after watering hole, traders and specialists reported again and again how strained their resources were. Wall Street could not survive another day like this. Luckily, innkeepers like Harry let them put the drinks on a tab.