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The day of the crash, it was often commented how difficult it was to sell stocks. Bids didn't appear, brokers refused to answer phones, stocks failed to open till well after 10:00 that morning, and a number of market makers on the New York Stock Exchange left their posts. This lack of liquidity has been blamed by some people for creating the fear and hysteria that bred the 22% decline. Like the overvaluation and program trading arguments, this argument is also too simple. If lack of liquidity caused the crash, what caused the lack of liquidity, and why on that specific day? This argument only succeeds at answering questions 2,3, and 4, it fails to explain why the markets chose October 19 to decline, and why the decline was preceded by no extraordinary events or news. There is a deeper cause at play here, something that caused the lack of liquidity and the resulting crash.

  JPK and Lope