Different Governments And Investors Reaction

The majority of people started selling their stocks and brokers sent out margin calls. People throughout the country watched the ticker (stock pricing machine) as the numbers meant their fate. The prices were falling down so quickly that the ticker fell behind. Stunned at the sudden crash, a crowd gathered outside the New York Stock Exchange on Wall Street. Rumors spread that people were committing suicides, but none of them was true. It was a great relief when the panic decreased later as the day progressed. Large sums of money were invested by group of bankers just to convince others to stop selling their stocks. By the end of the day, people started buying stocks at “bargain prices.” On October 24th, double numbers of shares were sold, breaking the previous record. The stock market fell again four days later. An unexpected drop in the stock prices through a large section of the stock market is called a stock market crash. Usually during high economic periods, become greater than their original value, but if this fades; then the market investors would have to sell their stocks at a lesser value. As the stock prices decline, panic sales can set in causing the market to

stock prices started to fall, triggering a state of panic on wall street" (Black Tuesday). This

Moreover, the New York Stock Exchange on Wall Street has a significant economic influence as it known to be the leading financial center of the world. Following the attacks of 9/11, it was forced to close down due to security reasons, and wasn’t opened again until September 17. The week that it had opened back, many of the market’s stocks such as DJIA had decreased considerably. All of the markets that people had invested in had to be gradually brought up again as business wasn’t in circulation in the aftermath of 9/11. In 2001 revenue, U.S. stocks lost $1.4 trillion in valuation for the week after its initial opening. The U.S government provided $11.2 billion in immediate assistance to the Government of New York City along with $10.5 billion in early

The Volcker Rule is said to limit speculative trading and do away with proprietary trading by banks. This change could make it more difficult for banks to be profitable. The act also contains a provision for regulating derivatives such as the credit default swaps that were widely blamed for contributing to the 2008 financial crisis. The Volcker Rule also regulates the financial firms' use of derivatives in an effort to prevent "too-large-to-fail" institutions from calling for big risks that might wreak havoc on the wider economic

First signs of economic trouble were shown when steel production, house construction, and car sales went down in early 1929, but very few people noticed this as a problem at the time. In March of 1929, the stock market did have a small crash, but Charles E. Mitchell essentially stopped the crash by continuing to loan out money even though many broker were issuing “margin calls. After Mitchell’s actions the stock market began to climb once more. Some economists were giving warning of a possible crash in the future, but they were all dismissed as many people did not want to believe it, especially with the price of stocks soaring shortly after the small crash. However these few economists were right about a future crash, throughout the month of September stock prices fluctuated and eventually crashed on Black Thursday (October, 24, 1929).

It began on October 28, 1929. The stock market crashed. But a few days before, the market dipped slightly; people panicked, racing to sell their stocks, this caused the shares to lose value, quickly. The crash was caused in part by buying stocks “on margin”. The public was only required

Investors in the stock market who had margins under the minimum margin requirement were given margin calls, which means investors had to either raise the margin, or close out their position. This made investors rush the exchange with cell orders, which are instructions to buy or sell on a trading venue. On this day, the stock market index fell thirty points and over the span over Black Monday and Black Tuesday the Dow fell twenty three percent. In the following months the markets recovered, but it was not a true recovery and led investors into furthering their loses. When the crash occurred, millions were wiped out, being forced to close businesses, and losing life savings. When panic struck, everyone wanted to withdraw their money, and this massive withdraw caused several banks to close, including the banks that had invested some of their clients’ money in the stock

Others who had bought on margin were forced to sell in order to pay back their brokers. People could not get rid of stocks fast enough. Everyone was selling and no one was buying. Stock prices plummeted even more.

The economic signs could not have become any clearer because the total amount of stocks traded dropped 14 billion dollars. Most automobiles were on sale, industrial production was down. Those who had purchased stocks on credit had to give their brokers cash if they did not have the cash by the deadline, the stocks would be sold to someone else. When the exchange opened on October 24, trading became even more frantic As stocks were being dumped, prices plunged when that happened people started losing money because the stocks that they bought before cost more than what they are getting back and others owe their brokers money. People couldn't handle it and they had to borrow money from the banks. It came to a point for the banks that everybody was borrowing money and they couldn't lend money anymore, so the banking industry collapsed. Half of the banks in the United States were not a part of the Federal Reserve, so their deposits were not guaranteed by the federal government. Six thousand banks closed down across the country. The ultimate problem when banks closed the public lost some of their money because "people couldn't get their money out of their bank" (Carson and Bonk 1). Business was closing people were selling goods on the street because they didn't have a job. At the end of 1929 there was 1.5 million people across the country without jobs. The

By signing the Volcker Rule into law on July 21, 2010, I should declare in regard to this reform package that President Barack Obama has, effectively, released a complex, ambiguous document. In addition, it represents a package of 963 pages long with 2,826 footnotes and 1,347 questions. In effect, on December 10, 2013, five federal agencies have technically approved the Volcker Rule. Moreover, these agencies include the Commodity Futures Trading Commission, CFTC, the Securities and Exchange Commission, SEC, the Federal Reserve, the Office of the Comptroller of the Currency, OOC and the Federal Deposit Insurance Corporation, FDIC. Furthermore, the Volcker Rule has been strongly hindering the banking industry in regard to the risk-taking

A London-based Wall Street Journal reporter, Charles Forelle warned the enthusiasm over investing will change dramatically if the shutdown continues, and especially if the U.S. government defaults on its debt. European markets are currently the most susceptible, and any delay in the stabilizing the US market will delay economic recovery there as well (Krugman, 1999). According to a senior International Monetary Fund official, in case of a U.S. debt default the entire global economy will be negatively affected, Stock markets crashes in many countries is a distinct possibility which will add to the problems of the recession that most of the world is currently undergoing. More damaging could be the failure to raise the debt ceiling which could cause a default in most economies is increasing ambiguity to a still shaky global economy.

I do feel that government regulations could have contributed to the flash crash. Reasons being, the government can create limitations that restrict the responsibilities and functions that some officials in the economy. Individuals responsible for creating and implementing policies that will impact business are motivated to increase their own security and well-being by accommodating the demands of politically well-organized special interest groups (Boyes, 2012, p. 163). Involvements in markets transpire to benefit special interest groups; not to boost economic efficiency. According to

On the morning of May 28th though, then this machine happened to fall behind, as it could not keep up with the amount of information that was being put into it. Normally this is no problem, but this time it happened to fall behind by 52 minutes. The biggest worry however, was that the prices on it were dropping, quickly. This, simply put, meant that there were a lot of trades happening at very cheap prices, and people were losing a lot of money, very quickly. Around lunch time, then “signs of public hysteria began to appear”, and this was surprising, as people continued to sell and sell (6). When in situations like this, it is always best to not panic and to stay calm throughout the process of these fluctuations. Normally, during midday, the volume (amount of stocks being traded) will drop, and there will be a break in the action of the normal trading day. However, during this day then the volume rose throughout this period, so prices, and peoples wallets, continued to deflate as investors started to sell everything. The stock exchange continued to be hectic and finally, at 3:30, the day ended. When analysts looked at the stock at the end of the day, they realized that 1 in 4 companies had dropped at least 50-60%, and big name companies such as IBM and Campbell Soup, dropped an astounding 10%. These big companies are almost untouchable, and a drop like that in one day is tremendous. The day was over though, and the trough had been

he eventual crash of the stock market altogether did not occur in one or two days, the crash was several weeks of dropping prices, of course with the occasional fluctuation up, but inevitable to drop once more. Leading up to the crash of the stock market many investors were playing the game of the stock market by buying stock on margin. Buying on margin was essentially buying stock son credit, an imaginary monetary value in a sense. Those using credit for stock and share purchases were, in a sense promising that they would pay the amount eventually. This type of purchasing didn’t actually give the companies selling the stocks any real money. When prices of stocks continued to rise throughout the 20’s eventually peaking in the year of 1929,

Many authors were argued of the several warning signals existed before the scandals were revealed or uncovered. One author (Kaufman) was alarmed by the way that the portfolios were measured over short-term horizons, at mostly yearly. He noticed that the underperformance was punished quickly. On the other author (Higson) set that Eron’s involvement with uncommon reason substance was a verifiable truth on Wall Street for years. The investment experts were busy admiring Eron’s creativity and aggressiveness in the market expansion without investigating on how it will profit in those new