Posted by 3Schechinger on January 15, 2010 at 10:23am
We took a quick quiz as soon as we walked in the class. It was 5 questions worth 10 points. Now we are talking about the stock market and when it crashed. Hoover was president during this time. We looked at a lot of graphs showing the drops in the markets.EmploymentIncome ProductionConsumptionGeorge Bush gave tax breaks so people could buy more stuff to help the economy. President Obama tried helping the economy with the stimulus package which gave banks money. During the depression they came up with the new deal.Causes of the Great Depression-• People quit buying things by late 20’s• Stock markets dropped out• Middle class wiped out• Federal reserve raised interest rates• Companies weren’t making money• Stocks were over priced• Banks closed• Buying stocks on credit• People went into debt• Banks gave out too much money• Stocks didn’t have real value• Massive fraud and illegal activityEffects• Investors and businesses lose millions• Thousands of banks fail, savings are wiped out• Businesses cut production, lay off thousands of workers• Unemployment rises consumer base drops further• Economic contractionCrash of 1929• What is pooling- Pooling is wealthy investors would pull the stock inflate it to the public, making money on the return. So basically at the end if you’re the one holding the stock you are the one that’s going to lose the money. Rich people would tell writers to talk up the stocks by how great they were so the common people would buy them.• What did the Federal Reserve do in the situation- distrusted the boom because the people were borrowing more and more money and not able to pay it back. This group increased the interest rates• What caused the crash- everyone soled stocks which sent people into bankruptcy. Prices went up and up.• Know basic outline of these days- everyone would half do stuff to make it look good but really it wasn’t
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