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The big one in 1929 happened largely because of unregulated margin trading. Margin trading is where you borrow money to buy securities. Today it's very highly regulated - you must have a certain amount of money in your account before you're even allowed to do it, you can only borrow up to a certain percentage of your account and so on. In the 1920s you could be far more leveraged than you can be now.
Anyway...when stocks started to go down in price (one of the things investors don't like is an issue where most of it was bought with borrowed money) people started pulling out of the market, and they couldn't cover their margin, which caused the market to go down even more in price...
After a few more crashes, the stock exchanges have learned they need to freeze trading on the exchange when things start getting really bad, to allow people to cool off. The things that will initiate a market freeze are called circuit breakers, and when one of them trips, no one gets to buy or sell for the rest of the day.
Kamron Roberts
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Was first in the chain of events that led to the Great Depression in the US?
the crash of the stock market
What was the first in the chain events that led to the great depression in the US?
the crash of the stock market
What was the first in the chain of events that led to the Great Depression in the US?
the crash of the stock market
What extraordinary events happened in 1929?
the stock market crashed which led to the Great Depression
How did the boom times of the 1920s lead to the collapse of the stock market?
the U.S. was paying Germany money to help rebuild its economy because of world war 1. America had an economic boom, so they felt that it was okay. This eventually led to America's stock market crashing.
What led to the stock market crash?
People were greedy
Who was president during stock market crash that led to the great depression?
Herbert Hoover was President of the United States when the Stock Market Crashed in 1929.
What events might have led to the rise or fall of Google stock?
How much it was unused
Did the wall street stock market collapse of 1929 led to the great depression?
True
What led to the Great Depression?
The collapse of the stock marketis what led to the Great Depression.
Why were African-Americans particularly harmed when the stock market crashed?
On October 29, 1929, the United States stock market crashed in an event known as Black Tuesday. This began a chain of events that led to the Great Depression, a 10-year economic slump that affected all industrialized countries in the world. The 1920s had been a time of wealth and excess in the United States of America, and stock prices had risen to unprecedented levels. This encouraged many people to speculate that the market would continue to rise. Investors borrowed money to buy more stocks. As real estate values declined during the late 1920s, the stock market also weakened. When stock prices started to slide on October 29, people rushed to sell their stock and get out of the market, which drove prices down even further. This cycle led to more and more “panic selling,” until the stock market fell to its lowest point in history.
What major event led to Great Depression?
Crash of an overbought, by use of margin buying, stock market
