Comparing the 1929 Market Crash and the Current Position in the Stock Market

During the 1920's millions of Americans began investing in stocks for the first time. They heard about how rich people were getting by investing so they all decided to do it. Many new investors entered the stock market using borrowed money. Stock market prices rose steadily as inflated market demand outpaced increases in the capital value of businesses. Investors began to realize that a large imbalance existed between stock prices and the amount of money needed to back them up, and began to sell. On October 29, 1929, great numbers of people tried to sell their stocks all at once. This created chaos in the accounting of stocks and for brokers. The New York Stock Exchange and other exchanges prices dropped so dramatically that this event became known as the crash of 1929. Millions of investors lost their savings in the crash and many were deeply in debt since

The 1920’s was known as the time for the stockholder stock prices, since they soared through the roof and reached new levels and created Millionaires overnight. This time period was marked as a large growth with the stock values being high, in 1925 the value of the New York Stock Exchange was approximately $27 billion dollars, and that figure skyrocketed to about $87 billion in just four years. This meant that each average stockholder had tripled their value of stock they were

The economic boom of the 1920’s enhanced the everyday life of Americans. Mass production of goods made prior tasks, such as washing clothes, simple and allotted woman to have leisure time. The assembly line utilized by Henry Ford made the production of automobiles cost less lowering the price for consumers. The amount of cars sold from 1921-29 went up from 1.5 million to 4.5 million. (Document 9) With more leisure time because of useful inventions people sought activities to occupy their free time. Radios grew increasingly popular and steadily increased to be in 10 million households in 1929. (Document 9) The economic power held by the U.S permitted technological advances to be attainable, which unconstrained the daily lives of many Americans.

The 1920s was known best for its wealth, parties and free spirits giving it the nickname of the ¨roaring 20s¨. Contributing to the the lavish lifestyle of the 1920s, women, known as flappers, challenged gender roles and broke social norms with their outfits and behaviors. New inventions, such as radios and model-T cars became the foundation for the thriving economy. The country 's culture had been making huge strides and the economy was on an upward climb. Everything about society in the ‘20s seemed to be flourishing. At a rapid rate, more middle and lower class people began investing massive amounts of money. Borrowing money from bankers to finance the get rich quick hobby these classes were engaging in produced dangerous trends. At the peak of the economy in the 1920’s, warning signs began to present themselves of a future economic decline. Many United States citizens ignored the small signs like a subtle rise in stock prices. As the small signs began to become increasingly more evident, big investors sensed danger and took proper precautions. However, the middle and lower class investors were not savvy enough to predict the crash. Finally, on October 29th, 1929, what is now known as ¨Black Tuesday¨, the Dow Jones Industrial Average dropped almost 23 percent and the market lost between $8 billion and $9 billion in value.

The U.S. economy was booming in the 1920’s. Stocks prices soared, as they were bought on margin for as little as 10% down. Market speculation is cyclical-that is, if one stock appears profitable, you buy it,

In the 1920s, American economy had a great time. The vast majority of Americans in 1929 foresaw a continuation of the dizzying economic growth that had taken place in most of the decade. However, the prices of stock crested in early September of 1929. The price of stock fell gradually during most of September and early October. On “Black Tuesday” 29 October 1929, the stock market fell by forty points. After that, a historically great and long economic depression started and lasted until the start of the Second World War. The three causes of the Great Depression are installment buying, uneven distribution of wealth and the irrational behavior in the stock market.

In the 1920 the United States economy was in great shape. World War 1 had just ended 2 years ago and other countries were paying back war debts to the United States. Also most things was cheaper to make because of Henry Ford's invention of the assembly line. Cars were being made cheaper and more people were able to buy them. More people were able to buy a lot of things because of “Buy now pay later” offers. These were things that let you purchase the item right away and pay over time instead of paying upfront.

The Dow Jones Industrial average reached its highest point which was 381.17 on September 3rd, 1929. The Dow Jones Industrial average plummeted in March 1929 but bankers reassured investors. On black Monday the percent in change was -12.82 and the change was -38.33. On black Tuesday the percent in change was -11.73 and the change was -30.57. The Dow Jones Industrial Average lost 90% of their value overall.

The stock market and its crash is argued by some historians in being a key impetus towards the great depression. The reality of the stock market was that many lived far below the poverty line and much of the investments which were carried out were bought ‘on the margin’. Additionally, there had been an immense amount of unregulated speculation resulting in huge debt as the levels of stock prices exceeded real economic growth, resulting in a continued lack of confidence and a fragile banking system. This resulted in an enormous crash to the extent that the Bull Market was described as ‘dead’ and billions of dollars of profits were discarded. In association with the weaknesses within the banking system, the fact that most of the rural banks were

During the days from October 28, 1929 to November 1, 1929, the stock market in the United States plummeted. Do to the over confidence of stock owners, prices for shares were valued up to ten times their actual value. Due to the large amount of inflation, the market was a bubble waiting to pop. On the final Tuesday of October 1929, the market lost approximately $14,000,000,000. Although the drop was very significant, the papers continued to tell the public that everything was fine. As it turned out, everything was not alright. The over confidence displayed by the American people had finally caught up to them.

But the prices didn’t stop rising, the stock market prices kept rising and rising while rapidly expanding, the expansion kept going until finally reaching peak in 1929, productions started being declined.

"The stock market is filled with individuals who know the price of everything, but the value of nothing,” is a relevant quote relating to the stock market during the 1920s quoted by Phillip Fisher, one of the most influential investors. The booming years of the 1920s, stocks and bonds were being sold at higher values than people could invest. Customers, banks and investors took money out of their pink piggy banks and embarked on investing in the New York Exchange Stock Exchange, nicknamed “Big Board”, on Wall Street. The New York Stock Exchange is the leading global exchange for today’s companies and customers. The New York Stock Exchange got gigantic demands from customers in the 1920s for a thrill of getting rich and effortless money. Investment companies and bankers bought up great stocks. They continued buying stocks and borrowing loans because they thought this boom would continue. The stock market grew rapidly as prosperity came into play during the 1920s since America want all these new and exciting products. The 1920s can appear to be described as the “years of prosperity”. New inventions and technology began to gleam in the 1920s, resulting with the rise in consumerism. The celebration of technology and rise in consumerism contributed to the selling of stocks and bonds, and the formation of “Black Thursday” and “Black Tuesday”.

The economy was at a highpoint in 1929. It was easier for people to buy stock (“Stock Market Crash of 1929”). People didn’t have to pay full price for stock they only had to buy a margin of the stock. People also saw buying stock as a quick way to get rich, so everybody wanted a part of it. By September of 1929 confidence that the market would keep rising dropped. And stock prices turned lower also (“Stock Market Crash of 1929”). Inexperienced investors that were there to make a quick buck sold their stock at the same time. Chaos flooded the stock exchange, and prices only began to drop more. Within two weeks stocks dropped to 37% of what they were worth. And even as bad as things got, most people didn’t think that the stock market crash would have an effect on the American economy, but we were in for a wakeup call, and we were soon aware of the full effect it had.

The emergence of First Financial Crisis in 1720 and the stock market crash of 1929 were both the results of speculation, but also market inflex-ibilities. The South Sea Bubble of 1720 succeeding Financial Revolution events in England, had its major shadow on European economy. The crash of 1929 in US was closely tied to post-war consequences and the over op-timism of Golden 20’.While both crises were separated in time by the two centuries, similarities between them outgrow the differences.

The booming 20s were drastically ended by the Stock Market crash of 1929. It went down in history as one of the worst economic downturns (Termin, 1976 p. xi). The panic at the stock market which led to many people trying to sell their stocks started on Wednesday, October 23 (Geisst, 2012 p. 185). Thursday, October 24, 1929 has gone into history as “Black Thursday” (Geisst, 2012 p. 185). The whole stock market lost 30 percent of its value before the end of the year 1929 (McGrattan & Prescott, 2001). Unfortunately,