Uncertainty, Speculation and Leverage in Stock Market Mechanisms: An Analysis from 1987 to the Present
Description
This paper seeks to emphasize how the presence of uncertainty, speculation and leverage work in concert within the stock market to exacerbate crashes in a cyclical market. It analyzes three major stock market events: the crash of Oct. 19, 1987, “Black Monday;” the dotcom bust, from 1999 to 2002; and the subprime mortgage crisis, from 2007 to 2010. Within each event period I define determinants or measurements of uncertainty, speculation. Analysis of how these three concepts functioned during boom and bust will highlight how their presence can amplify the magnitude of a crash. This paper postulates that the amount of leverage during a crash determines how long-term its effects will be. This theory is fortified by extensive research and interviews with experts in the stock market who had a front row view of the discussed crises.
Date Created
The date the item was original created (prior to any relationship with the ASU Digital Repositories.)
2019-05
Agent
- Author (aut): Graff, Veronica Camille
- Thesis director: Leckey, Andrew
- Committee member: Cohen, Sarah
- Contributor (ctb): Historical, Philosophical & Religious Studies
- Contributor (ctb): Walter Cronkite School of Journalism & Mass Comm
- Contributor (ctb): Walter Cronkite School of Journalism & Mass Comm
- Contributor (ctb): Dean, W.P. Carey School of Business
- Contributor (ctb): Barrett, The Honors College