The Stock Market Crash Wednesday, March 21, 2007
Collapse • Have you ever felt like all was going great in your life… But then everything collapsed? • What did that feel like? • Why did it happen? • Today we will learn about the greatest economic fall in our history. • Today we will learn about The Stock Market Crash.
Stock • Stock – A stock represents a share in the ownership of an incorporated company.
New York Stock Market Crash • Stock Market Crash – On October 29th 1929 the market “crashed” as prices went into free-fall.
Gambling on Stocks • As stock prices rose in the 1920’s, people hoped to get rich quickly. • They bought on credit, paying only a small part of a stock’s value, and promised to pay rest later. • When the market crashed they could not pay.
Overproduction • The 1920’s saw rapid increases in the production of new goods like cars, radios, and refrigerators. • Manufacturers were soon producing more goods then consumers could buy.
Uneven Distribution of Income • Even in the prosperous 1920’s, half the population lived at or below poverty line. • The income of farmers declined; Minorities suffered from unemployment and low-paying jobs.
Shrinking International Trade • American tariffs protected markets in the U.S., but made it difficult for U.S. to sell abroad due to other countries having tariffs of their own!
Shaky Banking and Credit • The banking system was unregulated. • Bankers often put their depositors money into bad investments. • Consumers bought on credit more then they could afford. • Many banks CLOSED.
Great Depression • Great Depression – Worst economic period in U.S. history.
Global Depression • Because the top economy in the world fell the rest suffered also. • Global Interdependence – When conditions in one part of the world are affected by other parts.