Today we finished watching the 20s video.Causes:• Over speculation during 1920s• Over production of goods• Buying on margin• Uneven distribution of the wealth in the 20s• Too much borrowing from the banks• Stock prices grossly inflated: did not have real value• Massive fraud and illegal activities• Federal reserve policyEffects• Investors and businesses loss millions• Thousands of banks fail• Businesses cut production, lay off thousands• Unemployment rises, consumer base drops further• Economic contraction in the u.s. spreads to Europe• The great depression sets inSMC videoCauses• People bought stocksStory of the stock market crash:One Black Thursday the market tumbled. On Tuesday the market went down to an extreme limit because everybody bought any of the stock from a few of the more popular businesses. Small investors lost all their money.What is pooling?Wealthy investors would pool their money, increased the value of the stock and would sell it, and make a quick buck.What did the Federal Reserve Board do?The board did not do anything because the stock market was on a shaky foundation based on borrowing money, so they did not do anything about it.
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