DID II SAY THAT? - What We Said About Black Monday

January 1988 -- Three months after Black Monday, October 19, when the the Dow Jones industrial average plunged 22.61 percent, Institutional Investor wrote, "We have yet to come to grips with the excesses and weaknesses the market crash laid bare." Some of the very excesses and weaknesses laid out in the January cover story, "After the Fall," reverberate today. The use of derivatives, one trader we interviewed said, had made it impossible to assess the exposures of market participants; others raised questions about "the degree to which users of financial technology have surrendered their destiny to the computer." Replace "the computer" with "computer models" and the concerns of two decades ago strike home: Many of the big losses recorded in the market rout triggered this summer by the subprime mortgage loan crisis have been attributed to the remarkable degree to which the computer models of quantitatively driven investment managers, particularly hedge funds, acting in unanticipated concert, exaggerated the volatility of stocks.