Maria Bartiromo Correspondent • Profile

While most people remember the Crash of '87 as a single day when stocks went into free fall, the cracks in the market began appearing in the trading week that led up to "Black Monday." CNBC recently talked to people who watched the storm clouds gather that week.

MONDAY, OCT. 12, 1987, NEW YORK STOCK EXCHANGE

Tim Metz (Reporter, Wall Street Journal, 1966-1989): “By 1987, people were looking over their shoulder saying, 'Oh, my God, the market is so high. The economy isn't this good. There's a lot of strain out there.  Maybe I ought to take my profits. Lots of nerves going into 1987 and in the middle of the year, it was intense.”

TV SCHEDULE October '87 Crash and Comeback CNBC takes a look back at the Crash of '87: Oct. 19 at 9p/12a ET Oct. 28 at 12a ET Oct. 29 at 9p/12a ET

Since hitting its record high only two months earlier, the Dow started to dip.  When the opening bell rang Oct. 12, the Dow sat at 2,471.  And as the market drifted lower, anxiety was on the upswing.

Gerry Corrigan (President, Federal Reserve Bank of NY, 1985-1993): “Sometime right after Labor Day of '87, the Fed — and I was part of the decision making process at that time, of course — did raise the discount rate.  And in response to that the long bond, the yield on the long bond, moved up quite sharply. And actually I think touched or penetrated 10 percent.”

Robert Glauber: (Executive Director, Brady Commission, 1988) “And generally the wisdom is when interest rates keep going up, eventually the market has to start going down, and it did.  Started going down in August, but went down not very quickly.”

TUESDAY, OCT. 13, WASHINGTON, D.C.

On Tuesday, the markets got bad news from Washington that threatened one of the key engines powering the bull market.

Tim Metz: “We have rumors that have been driving these risk arbitragers to dump takeover stocks because there's a rumor that somebody in Congress has got a bill that will take the tax advantage away from one of the favorite kinds of these deals called leverage buyouts.  On the 13th, the news is confirmed.  Yes, such a bill exists.  It's well along in the House Ways and Means Committee."

Sue Herera (Anchor, CNBC):  “And a lot of the deals certainly slowed down if not stopped.  Because there was no reason to do them, if indeed, the tax benefits were no longer in existence.”

WEDNESDAY, OCT. 14, 1987, WASHINGTON, D.C.

Tales from The Crash   Discuss the lessons of 1987 Could it happen again? Storm clouds gathered before 'Black Monday' Opinion: What we’ve learned

On Wednesday, the 14th, there was more bad news from Washington.  The trade deficit was $1 billion more than expected. 

Bill Griffeth (Anchor, CNBC):  “This was something that worried the bond market tremendously. Every time the government would announce the new deficit figures, it was another piece of the puzzle for Wall Street to worry about.”

Tim Metz: “Right away the dollar lost a percent of its value.  And this is in spite of the fact that they just raised interest rates a half a point to prop it up.  So now people are really scared. And they feel, 'My God, they're really gonna have to be more aggressive in raising rates. We've got to get out of stocks.’ And they began to get out. The smart money ran first.”

Tom Brokaw (Former anchor, NBC Nightly News): “It was a terrible day on Wall Street. The greatest single day loss in history.  The Dow Jones average plunged almost 95 and a half points."

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