Jeez I'm flaming a first time poster, lol. Just kidding BUT I think you're confusing Schwartz who came in long that day with Lewis Borsillino's book where Lewis talks about buying the lows on the Soros order the next Wednesday-it was a true story. My Godfather was down 8 figures that day and also bought 200 off of the Soros order and got everything back either by the end of the day or the next.
From you guys' perspective: comparing the "crash(es)" in 2008 for Dow/S&P to the older crashes in 97/98 or 87... do you feel that the crashes last year were not to that scale any more? Yeah Dow down more than 500 points would have all the nightly news reporting as a "crash" but the impact did not seem as severe as the old ones. Perhaps looking at the percentage drop the impact was not felt. A 5% drop in one day is quite mild compared to a 20% in one day. But the big down moves continued for days instead of them being just a one-day event. Do you think the crashes we have nowadays would be different from the old days - that it's very unlikely we will see a huge percentage drop in a single day (well for one thing the circuit breakers in NYSE is in place and last year it hadn't been triggered yet). We have big sell-offs. Perhaps consecutive sell-offs. But will we have "crashes" any more?
As far as one day events for me, '87 was only crash, every other one has just been a bad day or longer term bear. '87 was more than one day but Black Monday was an amazing day. We knew it would be bad, but didn't realize as traders just how bad because we were trying desperately as market makers to stay out of the way and figure out p&l or just where stuff was trading, until on a big Wall Street investment banks trading floor we looked up and saw hundreds of people standing around us. They were all the employees from the rest of the firm that came down to watch death on the highway on the equity trading floor. I remember several managers standing at the otc desk screaming out orders to try and sell stocks like AAPL from their personal account that were down 50-75% that day alone. They were beyond caring about the 'franchise' of the firms capital and positions but fighting to save their own lives. Every once in a while a severe screaming match would break out, right in the center of the floor, amongst two managers with differing strategies for the disaster. The NYSE was trading and a real mess. $5 spreads were the norm. IBM would be quoted $40 bid $50 offer down like $35 on day. Then a $45 bid would show up and someone would scream "there's a bid, hit it, hit it". Nothing was electronic, every order was phoned down to the floor. NASDAQ was insane. Like the 'eye' of a hurricane it was actually eerily, extremely quiet during the actual hours of the crash. We were told not to pick up the phones, we might have to buy something. Your positions were what you were going to come out with when the dust settled one day. The real horror of otc was the ensuing weeks. Bartering over trade breaks from the first few frantic hours of that day was a life changing experience for me. It was mandatory that all staff come in on Saturday following Black Monday to deal with the massive trade breaks that showed up on Thursday. T+3 was comparison with T+5 settlement. Once again nothing was electronic every trade done otc was word of mouth. Saturday we would get a call saying "I know you buying 5000 GENZ at $55, you DK (don't know)". Stock now at $17, that's a $190,000 'trade problem', which was a lot more money in '87 than now. There were so many of these calls we were overwhelmed. No 'proof' of any of these trades, you see your word was your honor back then, up until this day. These problems were the reason they changed NASDAQ. Other than modern day circuit breakers and ECN's NYSE essentially the same. Don't ever want to see it happen again. We sat around that day thinking what will the world be like after that day was over. I still remember the faces of the people standing around watching the horror from the fringes of the trading floor.
I remember incredible bid/ask spreads in the stock-index futures and locals "re-writing" their trading cards ( the CFTC was too ignorant at the time to have the cards printed with a numerical sequence ) to take advantage of orders from floor brokers who were "cuffing" the paper with their buddies. It was outrageous.