1989 Mini Crash
About 1989 Mini Crash
On October 13, 1989, the Dow fell 190 points, 6.9 percent, triggered by the collapse of a leveraged buyout of United Airlines. The crash revealed fragility in the junk bond market and LBO financing. The mini crash on Friday the 13th spooked investors. Unlike Black Monday 1987, the market recovered relatively quickly. The crash contributed to the recession of 1990 to 1991. It also marked the beginning of the end for the junk bond era, as Drexel Burnham Lambert filed for bankruptcy in February 1990. The event showed that LBO driven stock gains could reverse suddenly.
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