Faith Hudson Mrs. Kimmich English 11 17 December 2013 Rough Draft Instant Gratification. Self Indulgence. What do both of these words have in common? They are all major aspects as to why the stock market crashed in nineteen-twenty and again in two thousand-eight. The nineteen-twenties is most commonly known because of the Great Depression., But in two thousand-eight, there was also a stock market crash, known as the sub-prime crash, along with the housing market falling a bit itself as well. Bet you did not even hear that, and if you did it probably was not much. Both of these major markets where a result of society’s careless spending habits. The self indulgence of the nineteen-twenties and the great depression affected the Instant gratification of the two thousands so much that it caused a relapse in history causing the stock market crash of two thousand and eight. The stock market is where you buy or sell stocks in a company. A stock market crash is when stocks take a big decline in the DOW ( Dow Jones Stock Average). In the nineteen twenties the DOW hit an all time low with a decrease of ninety percent. The reason why the stocks fell were because twelve point nine million dollars in stocks were sold on just one day. That’s three times the amount sold on any other normal day. Over the course of the next couple of days stock prices dropped twenty-three percent. With americans spending money erratically on all these stocks, it was actually sending America into a downward spiral. Americans started buying stocks because they were starting to make more money and living the “American Dream” and owning stocks was apart of that dream. With everyone spending their money on stocks and furniture and houses and vehicles, no one ... ... middle of paper ... ...t reasons as the crash of 1929. Overvalued stocks. And how do you get over valued stocks? Buy the majority of people spending their money on these corrupted stocks. These people are all hoping to make more and more money off of these. Everyone is looking for an easy way to make money, because Americans are in need of instant gratification. They want the money now so they can self indulge themself. The way the people in our society are spending their money is evidently causing a repeat in history with the stock markets crashing. With no one really fixing the problem the first time in 1929, cause it to happen again in 2008. And if we don't fix it soon it's going to happen again in the future. In conclusion, the self indulge of the 1920's affected Americans so much that it affected the instant gratification of American in the 2000's, to cause a relapse in history.
During 1928, the stock market continued to roar, as average price rose and trading grew; however as speculative fever grew more intense, the market began to fall apart around 1929. After the stock market crash, a period began that lasted for a full decade, from 1929 to 1939, where the nation plunged into the severest and the most prolonged economic depression in history - the Great Depression. During this inevitable period, the economy plummeted and the unemployment rate skyrocketed due to poor economic diversification, uneven distribution of wealth and poor international debt structure. The United States began a period of uninterrupted prosperity and economic expansion during the 1920s, coining the term, the roaring twenties. Automobiles and construction became the most important and excessively relied industries in the nation as a result of the assembly line and other innovations.
The stock market crash of 1929 was one of the main causes of the Great Depression. Before the stock market crash, many people bought on margin, which caused the stock market to become very unbalanced, which led to the crash. Many people had invested heavily in the stock market during the 1920’s. All of these people who invested in the stock market lost all the money they had, since they relied on the stock market so much. The stock market crash also played a more physiological role in causing the Great Depression.
When “Black Tuesday” struck Wall Street on October 29th, 1929 investors traded 16 million shares on the on the New York Stock Exchange in just a day which caused billions of dollars to be lost and thousands of investors who got all their money wiped out. After the fallout of “Black Tuesday” America’s industrialized country fell down into the Great Depression which was one of the longest economic downfalls in history of the Western industrialized world. On “Black Tuesday” stock prices dropped completely. After “Black Tuesday” stock prices couldn’t get any worse or so they thought but however prices continued to drop U.S fell into the Great Depression, and by 1932 stocks were only worth about 20 percent of their value. Due to this economic downfall by 1933 almost half of America’s banks had failed. This was a major economic fallout which resulted in the Great Depression because it caused the economy to lose a lot of money and there was no way to dig themselves out of the hole of
The stock market expanded rapidly during the period of 1921-1929. At this time investors were optimistic about the stock market, so they traded stocks, which caused the stock prices to rise. The stock market boom led to asset prices rising at a fast pace. Which in turn outweighed the true value of the assets. Eventually, since the stock market did not reflect the true value of the stock, this led to a huge bubble followed by a crash. This crash is also known as the Great Depression that led to a severe economic crisis in the United States.
Firstly, the stock market crash in the late 1920s was one of the main factors that contributed to the onset of the Great Depression. The common goal of many Canadians in the roaring twenties was to put behind the horrors and doubts of World War I, and focus on what was to come in the near future. However, on October 29, 1929, the Stock Market in New York City experienced one of its worst days of all time. The catastrophic impact that the stock market crash had was enough to shift the world in the direction of an economic downfall. The rapid expansion of the 1920 stock market caused the market to hit an all-time high.
The 1920s were a time of leisure and carelessness. The Great War had ended in 1918 and everyone was eager to return to some semblance of normalcy. The end of the war and the horrors and atrocities that it resulted in now faced millions of people. This caused a backlash against traditional values and morals as people began to denounce the complex for a return to simplicity and minimalism. Easily obtainable credit and rapidly rising stock prices prompted many to invest, resulting in big payoffs and newfound wealth for many. However, overproduction and inflated stock prices increased by corrupt industrialists culminated until the inevitable collapse of the stock market in 1929.
There is no doubt that the stock market crash contributed to the great depression, but how? One way that the Crash contributed to the depression was the loss of money it caused to the average man. It is believed that in the first day of the crash almost a billion dollars were lost, this took a large amount out of the pocket of the common man. Without this money people were unable to purchase consumer goods, which the United States economy was based on. Another way the Crash contributed to the depression was the loss of confidence in the market. When t...
Post the era of World War I, of all the countries it was only USA which was in win win situation. Both during and post war times, US economy has seen a boom in their income with massive trade between Europe and Germany. As a result, the 1920’s turned out to be a prosperous decade for Americans and this led to birth of mass investments in stock markets. With increased income after the war, a lot of investors purchased stocks on margins and with US Stock Exchange going manifold from 1921 to 1929, investors earned hefty returns during this time epriod which created a stock market bubble in USA. However, in order to stop increasing prices of Stock, the Federal Reserve raised the interest rate sof loanabel funds which depressed the interest sensitive spending in many industries and as a result a record fall in stocks of these companies were seen and ultimately the stock bubble was finally burst. The fall was so dramatic that stock prices were even below the margins which investors had deposited with their brokers. As a reuslt, not only investor but even the brokerage firms went insolvent. Withing 2 days of 15-16 th October, Dow Jones fell by 33% and the event was referred to Great Crash of 1929. Thus with investors going insolvent, a major shock was seen in American aggregate demand. Consumer Purchase of durable goods and business investment fell sharply after the stock market crash. As a result, businesses experienced stock piling of their inventories and real output fell rapidly in 1929 and throughout 1930 in United States.
It is said that the cause of the catastrophic stock market crash known as the great depression was due mostly to uncontrolled political and industrial systems otherwise known as capitalism. However, the timeline leading up to the Great Depression proves that many other factors played a role in the stock market crash that occurred in the decade of the 1930's. So lets take a look at rather four, factors contributing to the great depression that we will further discuss in the following paragraphs. Four of the main causes that led up to the great depression were unequal distribution of wealth, uncontrolled political and industrial systems, high tariffs and war debts.
The speculation and the resulting stock market crash acted as the trigger for the already unstable United States economy. Due to the maldistribution of wealth and the unstable economy of the 1920’s, the nation headed into a decade of trouble. In response to its economic difficulties, the United States set up even higher trade barriers with other nations, causing more trouble within the nation. Many of the working class lost their jobs, and since these people did not have savings, they were in big trouble. Unemployment grew to 13 million by 1932 as the country quickly spiraled into a catastrophe. The Great Depression had begun due to the maldistribution of wealth, a bad economy based on over confidence, and the irresponsible erratic of the “bull” stock market.
The stock market crash of 1929 was the primary event that led to the collapse of stability in the nation and ultimately paved the road to the Great Depression. The crash was a wide range of causes that varied throughout the prosperous times of the 1920’s. There were consumers buying on margin, too much faith in businesses and government, and most felt there were large expansions in the stock market. Because of all these positive views that the people of the American society possessed, people hardly looked at the crises in front of them.... ...
] This catastrophic event is caused by the accumulation of a large scale of speculation by not only investors but also banks and institutions in the stock market. Though the unemployment rate was climbing during the 1920s and economy was not looking good, people on Wall Street were not affected by the depressing news. The optimism spread from Wall Street to small investors and they were investing with the money they don’t have, which is investing on margin as high as 90%. When the speculative bubble burst, people lost everything including houses and pensions. The main reason ...
What started these tragic ten years were really the events categorized under ‘economic factors’. The economy went into a downward spiral, first, with the Stock Market Crash of October 29, 1929, nicknamed “Black Tuesday” (PowerPoint). The cause of this was actually many factors all happening within a few months. Many companies went bankrupt from overproduction of goods and started stockpiling them. They assumed the economy will keep rising like it did during the “Roaring Twenties”; but when Europe started to mend from the destruction of the war, the demand for products went down. In addition, on October 29th, the value of the stocks became overpriced, and everyone wanted to sell while they were ahead. The sheer number of stocks on the market lowered their value so much, that the price afterwards was only a fraction of what it was before. However, it was not just the Stock Market Crash that overturned the economy, but the farmers also had trouble coping. In the early 1930’s, a massive drought swept through the prairies and the central US, killing off anything that...
In early 1928 the Dow Jones Average went from a low of 191 early in the year, to a high of 300 in December of 1928 and peaked at 381 in September of 1929. (1929…) It was anticipated that the increases in earnings and dividends would continue. (1929…) The price to earnings ratings rose from 10 to 12 to 20 and higher for the market’s favorite stocks. (1929…) Observers believed that stock market prices in the first 6 months of 1929 were high, while others saw them to be cheap. (1929…) On October 3rd, the Dow Jones Average began to drop, declining through the week of October 14th. (1929…)
Two months after the stock market crash, stockholders lost more than fourteen million dollars; it dropped more than 40%. It continued to decrease; it went down to nearly 90% from its 1929 highs. Before the crash the 1920s were known for the roaring twenties, parties, extravagant outfits, and the music. It was the decade where people were known to spend money, they were not afraid of spending it. But when banks started to crash that is when people started to panic and was trying to get their money back, millions of Americans lost fortunes. This caused companies to lose their values and no longer be able to afford to stay in business. William C. Durant joined the Rockefeller family and other financial giants to buy big stocks to prove to the people their assurance in the market but they failed to stop decline in prices. According to the website Globalyceum, US gross domestic product, in 1929 $103.6 billion, in 1930 $91.2, in 1931 $76.5, in 1932 $58.7, in 1933 $56.4. The total size of the American economy, restrained by gross local product, suddenly dropped following the crash on Wall Street from $103.6 billion to $66