Will 2007 repeat the madness of 1987?

If you remember 1987 at all, it is probably for the October hurricane and the stock market crash. Because they coincided, they are inextricably linked as though one caused the other. In fact, despite falling 23 per cent, the market was back on its feet before the debris of the storm had been cleared. Share prices ended 1987 higher than they began, making the crash a downward blip on a rising graph — unlike the turn-of-the-21st-century meltdown that has left prices well below their dotcom levels after six years.

As the 20th anniversary of 1987 looms, rather than remember the October storms we should look back to the preceding months of market madness — and the subsequent era of corporate disasters. This was the year when Tie Rack was floated to raise £12 million — and equity-mad punters subscribed more than £1 billion. It was the year when the Saatchi & Saatchi advertising group — fresh from giving Margaret Thatcher her third election victory — proposed a bid for Midland Bank, which had once been the world’s biggest bank.