Today, we finished up the video and finished up our notes. Then we had a work day.
1. What is pooling?
When rich people pooled their money together and secretly buy a whole bunch stocks, jacked up the prices, and then sold them to unsuspected investors. Pooling wasn't illegal then.
2. What was the Federal Reserve Board’s take on the booming stock market?
They distrusted it. They thought it was dangerous because it was based on borrowed money. They saw it as an issue. At first, they did nothing, which caused people to panic - caused them to sell. They knew we needed to increase interest rates. They were scared because they thought the people would stop borrowing money, which would make it crash. The economy would go down dramatically.
3. What did the Federal Reserve Board do to prevent the crash?
They did nothing, which caused people to panic. They failed, felt stuck, then they rose interest rates up to 20%, which was really high.
4. What did Charlie Mitchell and several other Wall Street tycoons try to do to stop the crash?
(In March)They announced that the National City Bank would provide 25 million dollars of credit.
(Black Thursday)The same thing again- they offered credit again. Then they bought a bunch of stock, it did work, it brought the prices back up, for the day. Over the weekend, people thought it was time. Tuesday the market went waaaay down.
5. What were the causes of the stock market crash based on the video?
Stock market was not regulated by government - which led to pooling.
Stock prices were over inflated.
Federal Reserve Board didn't do much.
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