Stock Markets Exposed
the stock market crash opinion?
In 1929 the stock market crashed in your opinion what were the 4 biggest reasons and which one was the biggest cause and why?
Public Comments
- I highly doubt that we will have a crash; i believe the worst (9-11-2001) is behind us. I see growth at 2 - 2.5% and inflation contained. If we can get the auto and home industries rolling again, we will have a robust economy...i predict the dow will end the year at 14000.
- over extension of credit, stock market was loaning 90% on most if not all stocks, a run or callng in of all debts, the gerneral depression in the world market, personnel over spending by many americans based on the prosperity from ww1 and shortly thereafter. these issue are waht led to the formation of the SEC and the first stock market laws in 1933 and 34 to prevent such reoccurance, eg it is now required that 50% all stock purchases be paid for upfront, the rest can be borrowed from the stock broker, this is called regulation T biggest casue was probably over extension of credit
- Well, I found more than 4, but I would say that the 2 main reasons were the drop in sales and the fear of the investors. A) Overproduction Reasons: 1- Companies were producing too many goods. 2- American goods couldn't be sold abroad -other countries had put taxes on them to make them more expensive. 3- Since the demand for goods began to fall, workers' wages were cut and many became unemployed (this implied they could no longer buy the nwe consumer goods.) 4- Farmers couldn't afford to buy the new consumer goods. B) Money-Stock Market Reasons: 1- People had borrowed too much money and couldn't pay it back. 2- Few controls on the buying and selling of shares 3- Propaganda encouraged people to spend more -they could pay things in installments 4- People thought that share prices could only go up, so they invested more than they could afford in the stock market. 5- Banks didn't have enough money in reserve to help businesse s in trouble -they had lent too much (loans) All this brought the roaring twenties to an end.
