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The stock market crash of 1929
Transcript of The stock market crash of 1929
What is the stock maket?
You pick a stock, if the price of your stock goes up then you make money but if it drops then you lose money
The stock maket can be compared to gambling.
The goal of the stock market:
The main goal of the stock market is to allow smaller companies the opportunity to expand by selling shares of their business. In other words, raising money.
How do stocks work?
Typically: the more investors invest in a stock by buying shares the more the price of the shares go up.
The investor can sell the share for more than they bought it, making them money.
However this can work in the other direction. If more shares are sold then bought, the value of the share decreases causing a loss of money.
The stock market can be a very risky way of making money and many people have lost every penny the owned to the stock market
The crash of 1929
In the 1920's a lot of Americans were heavily invested in the stock market.
More and more people kept buying shares, investing in the stock market
Most Americans were so heavily invested that they were borrowing money to put in the stock market
By 1929 about 2/3 of the money in the stock market was loaned money.
Close to 8.5 billions dollars
Big amounts of money in the stock market meant the price of shares went up, making more money for investors.
Americans thought that the stocks would keep going up
This encouraged more people to invest more money
People invested because they expected the price of shares to rise so they could make profit.
That expectation caused the shares to keep rising even if they weren't worth the uprising price.
The bubble finally popped on ''Black Thursday'' (October 24, 1929)
The market was unstable such that the smallest decrease in profit would cause a massive share selling
Black Thursday was the day when the market took a downturn
Some people lost confidence in the market and sold their shares causing the value of the market to decrease even more, which led to a mass panic selling
The maket lost 11% of its value in 1 day
When the market when into panic selling, the investors when to the bank to sell their shares.
However, the banks were also heavily invested in the stock market with all the loans, that they didn't have enough money to pay back the investors
With the market crashing at a very fast pace the investors couldn't get their money out before it was all gone.
A lot of Americans were left broke because they were so heavily invested
This plunged America into its Great Depression
THE GREAT DEPRESSION
The market stabalized for a couple of day
But on October 28 and 29, 1929, Black Monday and Black Tuesday the market re-crashed and lost close to 30 billions dollars in two days, the investors wanted out and the stocks plummeted!
The stock market crash was the main cause of the Great Depression
The use of credit to buy appliances, houses, cars and other costly items was taken away due to the banks being bankrupt because of the stock market crash
Americans lost the power to buy products and were very limited in choice of food and accessories.
Businesses when bankrupt
Industries when out of production
Americans when unemployed
Farmers and the food industries were also in a Great Depression but not because of the stock market
Due to the collapse of international food markets after world war 1
Recent droughts, dust storms and lack of sun light
The price of food had taken a massive downfall and many farmers were turned broke and homeless like the victims of the stock market crash
By 1932 unemployment reached 20%
Jobs were very scarse and didn't pay well
Many people lived dumps and search for food in garbage
When Franklin D. Roosevelt took office in 1933 unemployment reached 24.9% and close to 14 millions Americans were jobless
In the stock market crash businesses and industries had lost a lot of capital, they had to cut back on workers, workers time and wages
This increased the unemployment problem
He had a plan to try to help Americans by reforming banks, agriculture, stock market, hydroelectricity, ecology and protecting mortgages and credit
Franklin D. Roosevelt tries to get America to rebound from the Great Depression
However America rebounded due to the bombing of Perl Harbor
This event sent industries into full war production with jobs for almost every American
LINK TO THE NOVEL
To kill a mockingbird has a link with the Great Depression
The setting of the book is in and old "Shantytown" also called Hoovers ville
During the depression the president Mr. Hoover said that the government was not to help Americans but let them figure it out.
Maycomb County would be considered a shantytown and there were many little town and county like Maycomb that were filled with poor people because of the stock market crash and the great depression
The story is also happening in the middle of the stock market crash and the great depression