Then thump. We got a harsh lesson in the realities of capitalism as billions in value was destroyed in days.
Luckily we all learned our lesson, adjusted our attitude to risk, saved hard, diversified our investments and steered clear of the shonky property speculator types that cause these crashes in the first place.
Oh that's right we didn't. We did it all again 20 years later.
Doing the research for the obligatory 1987 crash coverage - which you'll read plenty more about as we get closer to October 20 - the real shock was just how quickly the time has gone since we covered the last anniversary.
What a whirlwind five years, looking back at the headlines is almost as interesting as looking back to the 1980s.
In October 2007 the worst of the GFC was still one year away.
We'd had the credit crunch, which in the middle of 2007 saw wholesale lending rates spike.
And we'd had the first wave of finance company collapses - Bridgecorp had gone and Geneva was freezing funds.
But generally the prevailing conditions were still bullish.
These were the last days of the boom.
The OCR was still on the rise as the Reserve Bank attempted to deal with rising inflation which was driven by the global commodity boom and the local housing boom. And we were every bit as obsessed with the high dollar as we have been in the last few weeks.
Back then we were also blaming monetary policy and debating the merits of having the Reserve Bank target growth as well as inflation.
In fact, we were having a parliamentary inquiry into the issue.
With all the noise about monetary policy being made by New Zealand First and Labour of late it is easy to forget that this is something that has been looked at closely - and rejected as unrealistic in the very recent past.
What else was filling the business pages five years ago?
Well, the battle for Auckland Airport was in full swing. Canada Pension Plan was offering $3.65 a share, a bid that was unsuccessful.
There was also talk of a private equity bid for SkyCity and the Warehouse was considered a target for Australian giant Woolworths.
A story from the October 2, 2007 notes that there had been $11 billion worth of merger and acquisition activity in the first 9 months of that year.
That included the private equity buy-outs of Yellow Pages and TV3 owner Mediaworks.
Five years later and we are only just starting to see signs of life in the M&A cycle.
Some of the Business headlines from October 2007 evoke a strong sense of Groundhog Day: "Jury still out on newspaper web strategy" for example. Others are likely to raise a wry smile when viewed with the benefit of hindsight.
"Hanover says 'firesale' part of the plan" reads a headline from Saturday, October 13.
Or for the aviation buffs: "Boeing delivery on track for NZ" in which Boeing promises Air New Zealand will be flying its new 787s by the end of 2010 (they are now due in 2014).
Inevitably there are those who complain that the media failed to predict the severity of the meltdown that unfolded over the next 12 months.
It is probably worth pointing out that making predictions isn't really the media's job.
Our starting point is to report the present as accurately as we can.
However, we do offer up the forward-looking views of the highly trained experts we have access to.
Specific predictions are almost always wrong - unless you are prepared to make them open ended, then they'll end up being right eventually.
But even so, there were plenty of warning signs amid the bullish economic data in late 2007 for those who wanted to see them.
The bank economists (who reject the term predictions but do forecast and will offer odds on various scenarios) were quite blunt in their assessments.
Westpac economist Brendan O'Donovan reckoned there was a 25 per cent chance of the world economy imploding - pretty strong odds really.
Certainly strong enough to give anyone reading pause for thought.
On the upside, he added, New Zealand would be well buffered from the worst because: "If the global economy implodes, our exchange rate will likely drop like a stone, buffering the impact on our exporters and dispersing the pain by making consumers take some of the hit in the form of more expensive imports."
And so it played out, at least until the rest of the world caught up with how well buffered we had been and started buying our dollar again.
One thing is certain, five years on the world is a much more cautious place. The investment market is more heavily regulated.
New Zealanders are saving, they are investing conservatively in bank deposits and KiwiSaver funds.
Some will say we're still overly obsessed with property although the speculative end of the market is pretty quiet outside of a few hot Auckland suburbs.
We're taking our medicine and buckling down to a slower and hopefully steadier pace of growth.
After the lessons of 1987 and the finance company crashes everyone seems a bit older and wiser.
Have those lessons really been learned?
Perhaps, by some. But when it comes to economic cycles history does have a habit of repeating.
Life is short and it is natural for humans to strive to reach their goals more quickly.
It is no crime to devise more efficient ways to create wealth.
But we should never forget the shortcuts and loose practice that underpinned the failures of 1987 and 2007 and took so great a toll on the wealth of so many.
