If you work in the banking sector, you’ve probably heard of the Flash Crash on May 28, 1962. The day marked the beginning of a three-day turmoil for the stock market. The 72 hours illustrated the peculiar behavior of Wall Street bankers and investors’ forecasts. That day confirmed the words of the famous banker J.P. Morgan about the financial market, “It will fluctuate.”

Half a year before May 28, 1962, the stock market was sharply declining, leading to a pessimistic atmosphere at the New York Stock Exchange. A lot of trading took place on that morning. The central office was in chaos, causing delays in updating stock prices. At that time, workers did all calculations manually. The delay in knowing the actual price of stocks by 45 minutes sparked panic among investors. They feared the actual price could drop during this time, and calculations would not reflect reality. As a result, they began rapidly selling off their stocks, leading to a downward price spiral. Their fears and predictions came true—the collapse wiped out $20 billion in stock value.

Investors were shocked. They believed that the Dow Jones Index could not fall below 500 points. It is crucial in the market area because it measures the value of the overall stock market. So, when the value approached this level, a buying panic ensued due to expectations of price increases. Within three days, the market returned to its normal level. Stock exchange officials stated that the government should pay more attention to the “business climate.” By this, they meant the mood and irrational expectations of the financial market.

No one could explain the crisis of 1962, but it taught a lesson that changes can happen unexpectedly. An anonymous seer of the New York Stock Exchange claims that behind every growth comes a new collapse, and so on. He commented, “As to whether what happened that May can happen again—of course it can. I think that people may be more careful for a year or two, and then we may see another speculative buildup followed by another crash, and so on until God makes people less greedy.”