Posted by 5whitneyyy on January 14, 2010 at 11:54am
Today we talked about doing our reflexive blogs and our assigned blogs. We continued on our discussion on the stock market crash. Overspeculation was when people speculated the land but they wanted to survey it to see if it was good land. If it was good land they'd buy it cheap and wait to sell it until it is worth alot more then they bought it for. People didnt really pay attention to if companies were making money. They just looked at the stock price, which made it go up quick. It made stock prices become very deflated. Companies were making to much, and people weren't buying things because they already had the things or they were in dept from buying on credit. They borrowed to much money from banks. They were just giving money out because times were great. The people dont pay the banks back. So they lose money and may close because of them. The Federal Reserve raised the interest rates to try and help the problem. The Federal Reserve board didnt do much except for raising interest rates. Buying stocks on margins is buying stocks on credit. In the 1920's it was great, but if stocks go down they start selling. They started buying things with money that they didnt have yet. The effect of the stock market crash was banks closing. Which led to people losing their life savings.Businesses would close down and people lost jobs which started the cycle we talked about yesterday. The cycle keeps repeating itself. People would lose money, banks would close, businesses would layoff alot of people. etc. The Great Depression helped lead to dictators running things because they promised better times. They say things are going to happen, and they do.The Causes of the Stock Market Crash video.1. CausesWhen prices went up, the stock prices when up. When they went up, no one would buy things.2. Story of stock market crash3. What is pooling?4. What did the Federal Reserve Board do?
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