How big is the risk of another Black Monday equities crash? That’s the subject of this morning’s very good Financial Times “Big Read” in advance of tomorrow’s thirtieth anniversary of the crash. There are plenty of similarities between today and the status quo just before the Black Monday crash, the salmon-colored paper argues, quoting a trader still in the game after surviving the 1987 crash as noting, “People just keep buying the dips and following the money up. When you have been doing this for over 50 years, when you see those similarities, you say the last time it got like this it didn’t end well.”

Notes the paper: “No two market eras are alike, yet the ‘buy the dips’ mentality — something that has been stronger than ever on Wall Street this year — is only one of a number of striking parallels with 1987. After hitting a succession of fresh all-time records, valuations are stretched. Now, as then, the US is engaged in sabre-rattling with foreign foes, including Iran. Trading strategies designed to protect investors could end up exacerbating any correction, just as in 1987, while regulators could be as ill-placed to monitor risks as they were back then.” What’s more, it says, is that this comes at the same time as “there is a perennial worry that a bout of fierce selling, particularly in ETFs indexed to less liquid securities, could exacerbate market losses.”

Why another Black Monday may not happen: “Even leading market sceptics, many of whom believe stock prices could start to drop, doubt that another extreme sell-off in equities might be imminent. Partly this view comes from a belief that over-confidence is currently absent.”