My 1987 Crash Experience

So a lot of people asked me to recount this, God knows why, but I'm happy to do it if I can get it done before the Astros game.

In 1987 I was at UT, having just finished my freshman year. I was interested in the markets, so I applied for an internship with Dean Witter.

They didn't take anyone who wasn't going into their junior year, but the broker who was looking (Ken) really dug my interview and recommended me to the manager for a second interview, because he wanted to go against the custom to get me.

That interview is a whole other story but when he asked "why shouldn't I give you this position", my answer was "because if you do, one day I'll take your job". He was aggressive, loved that, and let Ken hire me.

I went in after class three days a week and made cold calls and stuff. It wasn't selling, that wasn't legal because I had no license. I was gathering information and trying to get people to talk to Ken.

I was good at it and into it. My parents bought me some ties and nice shirts and slacks and so forth, and I dug in hard. I was putting up big numbers.

Ken was a giant broker with his own little suite in the office on one end. Had his own reception area, conference room, and giant office. He was also as cool a 40 year old dude as my 18 year old ass had ever met.

Anyway, one day I get out of class and head to the office as per usual.

I walk in and there are women running everywhere, literally like the building was on fire. I thought there was a plumbing leak, fire, or fight or something. Back then we didn't think about active shooters.

As I walk past the empty reception desk I see the first glass-walled office and this older dude, probably my current age (55) literally sitting at his desk crying like a fat kid who dropped his ice cream. I mean sobbing audibly through the window.

I turn right to head to Ken's office suite and I see the same. Guys screaming into their headsets (we had wires attached to our phones back then), some crying, and the assistants running around.

I found out the pneumatic tubes we used to send orders (they were handwritten on tickets back then) were overloaded and broken. They were running orders to the cage for processing.

I get to Ken's office and walk in and he's on he phone and he literally waves his hand at me and screams "GET THE FUCK OUT!!!!!"

I'm in complete shock.

I go to leave and his assistant runs past me back to his office and I keep going to the door.

She runs back and grabs me and says "wait... he needs you to call all these people and tell them to relax and answer the phone because Ken's gonna call them soon."

She hands me his "B book", which is the way he kept his clients. They were on paper with ticket copies behind each person's page. They were arranged usually by size of account and activity. He was calling the "A book" and I was letting the B people know he was going to get with them.

So the actual Dean Witter computer system got overwhelmed and pseudo-crashed.

When we were placing orders they were coming back all fucked up in batches. So 10 people would sell IBM, and the trades were so fast and furious and everyone was selling that you couldn't match a sale to a ticket.

At the end of the day the floor sent us massive notices that said shit like "your branch sold 10,000 shares of IBM at $100 (no idea if that was the price - just an example), 8,000 at $90, 15,000 at 87 5/8 (that's the way the prices used to be, in 1/8s), and 23,000 at 84."

We all met in the conference room (I was there to find Ken's client pages when he asked for them) and literally, I shit you not, argued over who would get what price for which client.

The manager would say "we've got 27,000 shares of Dell at 4 and 5/8 gone, 18,000 at 3 7/8, and 50 thousand at 2 7/8. Make your pitch."

Ken would say "I need 10,000 of those at 4 5/8. My guy has 2.4 million with us, he's been my client for 5 years, and he fucking deserves it."

Then other guys would ask for shares and the manager would ask who they were for and why they should get them.

We were there all night. These guys cussed each other, cussed the manager, threw shit, stormed out and came back... it was a fucking war.

Basically the bigtime brokers got the best prices, and they gave their best prices to their best customers.

The thing is, that practice is illegal. It's called allocating trades. It what made Hillary Clinton a PILE of money in futures. She always got the lowest buy price and the highest sale. Not in that crash, way later. Long story but check it out.

Anyway, that was all kinds of fuckery. Guys quit over it. If the manager didn't like you, your customers got raped.

So we were there fighting for pricing til like 9 or 10, and calling clients to deliver the bad news until almost 1 a.m.

So that sucked, but the weirdest was yet to come.

Ken asked me to skip class the next day to help him call everyone he couldn't get ahold of, help the assistant field incoming calls, and work the paperwork for his books. I did it. Screw it. This was gonna be my career.

I get there at like 7:30 and there are two effing armed guards at the double doors, which were closed and locked.

I ask if we're closed (I just assumed the whole firm had gone under - I was still in a half daze), and got ready to leave. Security guy asks my name. I say "Bob Wheeler. I work for Ken."

Dude knocks on the door and says "Bob Wheeler. Kid who works for Ken."

The door opens and another armed guy lets me in. He takes my backpack and empties it on the reception desk. Says "okay, take your stuff."

I get back to Ken's suite and find out from his assistant that we're all getting free breakfast. It was massive and badass. Like everything you could ever want. Bacon, eggs, biscuits, juices, fruits. I mean a major spread.

So I ask her if it was bonus for some kind of great job and she shocks me to death.

She says "no, and we're getting lunch too. We're locked in. We aren't leaving til the market closes and no clients are allowed in. There've been several death threats to basically everyone. When you leave you'll have an armed guard."

I about shit my pants. It wasn't the same for a LONG TIME. The guys didn't go out for drinks together anymore, people didn't walk into each other's offices, nothing. For six weeks it was like working in a fucking cemetery.

To Ken's credit he had people buying with both hands and I'm sure everyone who listened ended up rich, but it was a goddamned bloodbath and lots of brokers never recovered.

So that's the story. When the market goes down 5% I'm not fazed.