The market then recovered for several months, starting on November 14, with the Dow gaining The following year, the Dow embarked on another, much longer, steady slide from April to July 8,when it closed at For the rest of the s, beginning on March 15,the Dow began to slowly regain the ground it had lost during the crash and the three years following it.
I believe that there is so much to learn from this incident in order to prevent from reoccurrences of potential financial downfalls. The great depression was the longest and most severe economic depression ever experienced by the industrialized Western world.
Even though the depression was relatively mild in some countries, it was severe in others, particularly in the United States, where it was originated. After World War I, the United States had become the major creditor and financier of postwar European countries, whose national economies had been greatly weakened by the war itself, by war debts, and, by the need to pay war reparations.
So, once the American economy weakened and the flow of American investment credits to Europe stopped, prosperity tended to collapse there as well.
The Depression hit hardest those nations that were most deeply indebted to the United States such as Germany and Great Britain.
It was a time of enthusiasm, confidence, and optimism, and people believed in infinite possibilities. They were taking their savings out and invest it to build new technologies and new inventions. Even though, there is no agreed upon listed causes of the depression, the stock market collapse of was its biggest reason.
It all started with the stock market collapse In the s, many invested in the stock market, which seemed an infallible investment in the future. As more people invested in the stock market, stock prices began to rise. Stock prices went up and down throughout and This flow followed by a sharp upward trend in and enticed many more people to invest causing the boom to begin by The stock market boom changed the way investors viewed the stock market — it had become a place where people believed they could get rich quickly.
The stock market no longer was for long-term investment. Stocks had become the conversation topic for everyone in everywhere because ordinary people were able to make millions off of it.
Although an increasing number of people wanted to buy stocks, not everyone had the money to do so. When someone did not have the money to pay the full price of stocks, they could buy stocks "on margin.
Buying on margin is risky: In the s, the investors only had to put down 10 to 20 percent of their own money and thus borrowed 80 to 90 percent of the cost of the stock.
Therefore, so many speculators bought stocks on margin and neglected the risks that came with it due to the never-ending rise in stock prices.
The profits from trading seemed so assured that even many companies and some banks placed their customers' money in the stock market.
With the stock market prices upward bound, everything seemed so wonderful.
When the great crash hit, everyone was taken by surprise. However, there were early signs of the crash. Five days before the incident, stock prices tumbled and a large number of people were selling their stocks.
Margin calls from banks were sent out to borrowers. Across the country, people were closely following the rises and falls of the stock tickers. A crowd of people gathered outside of the New York Stock Exchange on Wall Street, and rumors circulated of people committing suicide.
Things got intense and stressful on the market.
Following afternoon, several banks pooled their money and invested into stock market to convince investors to stop selling their stocks, which actually gave some relief to many and the subsided the panic that the public had. However, it was not enough to stop the danger.
This is the worst single day in stock market history. People were in a panic and rushed to sell all the stocks they had in hand. Since everyone was selling and no one was buying, stock price collapsed.
Even banks started selling the stock they had. Panic hit the country and over Deja vu the Crash of and the long Great Depression “The United States is more vulnerable today than ever before including during the Great Depression and the Civil War,” says Thom.
Stock Market Crash of started the Great Depression October of saw the collapse of the stock market, which obliterated 40 percent of the value of common paper stock, decimating the investment portfolio of many. 29th, the United States stock market fell percent and percent respectively, marking the beginning of a down market that lasted over three years, the .
Great Depression In turn, the stock market crash triggered other economic weaknesses and plunged the United States into the ______ __________--a severe economic recession in the s that affected all the world's industrialized nations and the countries that exported raw materials to them.
The Great Depression lasted from to and was the worst economic depression in the history of the United States. Economists and historians point to the stock market crash of October 24, , as the start of the downturn.
The stock market crash of was a four-day collapse of stock prices that began on October 24, It was the worst decline in U.S. history. The Dow Jones Industrial Average dropped 25 percent.
It lost $30 billion in market value.