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A Stock Market crash is a sudden dramatic decline of stock prices across a significant cross section of a stock market, which results in a significant loss of wealth. Crashes are driven as much by panic as other underlying features.
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How did the stock market crash?
A stock market crash is a sudden dramatic loss of value of shares of stock in corporations. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles such as the dot-com boom.The most famous crash, the Stock Market Crash of 1929, started on October 24, 1929 (known as Black Thursday), when the Dow Jones Industrial Average dropped 50%. This event preceded the Great Depression. The succeeding years saw the Dow Jones drop a total of over 85%. Richard Armour, in his satirical American history book It All Started With Columbus, remarked that the 1929 crash occurred "near the corner of Dun and Bradstreet".There was also a crash or "adjustment" on Monday October 19, 1987, known in financial circles as Black Monday, when the Dow Jones lost 22% of its value in one day, bringing to an end a five-year bull run. The FTSE 100 Index lost 10.8% on that Monday and a further 12.2% the following day. The pattern was repeated across the world.The stock market downturn of 2002 was part of a larger bear market and a Dot-com stock market bubble as well as Enron corruption that took the NASDAQ 75% from its highs and broader indices down 30%.Stock Market CrashDuring the 1920s, people invested in the Stock Market, hoping to make a profit on their investments. At the time, there was no supervision or government regulation of the Stock Market. By the end of the decade, prices of shares on the market reflected nothing more than the willingness of investors to pay those prices. Everyone expected the market to continue to rise. However, economic problems had already developed that would lead to the crash of the market. People invested in companies that were not economically sound. Businesses that appeared healthy had large inventories and could not sell enough of their products to justify the price of the stock on the market. Stock brokers gave loans, called margin buying, to people to invest in the stock market. When the brokers began to demand those margin payments, the investors did not have the money. There was over speculation by just about all the investors. At the time, even banks were permitted to invest customer's savings in the stock market. The market began to rise and fall in the fall of 1929. On October 24, known as Black Thursday, a record 13 million shares changed hands and the value of the stocks collapsed. On Tuesday, October 29, panic had set in and speculators dumped over 16 million shares on the market. But, there were no buyers for those shares. The "crash" on Tuesday created a paper loss of $30 Billion. AnswerThe actual stock market crash happened on what they call "Black Thursday" in 1929 (although there had been other critical and equally black days before that particular Thursday). At the time the stock market had absolutely no political oversight by any government department like we now have with the Securities and Exchange Commission (SEC), and stock manipulation by the big players was rampant and often ill-concealed. Small (and I mean the "ordinary working folk" started to believe that they too could buy stock, ride the coattails of the big financiers, and cash out before a stock bust. You have to remember that this was at the end of a decade of the most rampant and conspicuous prosperity and consumerism; it was (although nobody new it at the time) the end of The Jazz Age and nobody thought the good times could, should, or ever would, come to an end. The small-time players' problems started because they were allowed to buy stock with just 10 percent down; what is called buying on a margin. But, when a stock inevitably tanks as the big manipulators feel they have driven a stock as high as they can, the little guys have to come up with money or they lose the stock. And the money they put in. Some of the BIG players lost money, of course, but comparatively few of them were wiped out as the small players were. Mostly this was because they were all in on the insider dealing, and the stock the little fish was buying was stock that had been dumped by the big players who were, by now, manipulating another stock to the stratosphere. A few of them did bust of course, and a few of them took there own lives although precious few of them actually rained down from upper-floor windows as is popularly believed. That's the short answer to WHAT. The WHY is much more complex, and you'd be hard pressed to find an economist who could tell you exactly why. A good, short and easy to read paperback (considering the subject is economics) to get hold of from Ebay or Amazon or anywhere else is from the great Harvard economist John Kenneth Galbraith: "The Great Crash of 1929" published by Avon Books. Even Galbraith cannot point to a specific single reason for the crash, but there was plenty of blame to go around.
What is Stock acquisition from open market?
It is the process of buying stocks of a particular company from the stock market. The number of stocks that can be acquired in a particular day would depend on the number of stocks that are available for sale on that trading day.
Will the UPA Elections results have any impact on the Budget 2012 and the Stock market?
Election affects the budget and budget will affect the pricing policies and this will decide the proportion of income distribution of an individual into consumption, savings or investments in bullion or stock market. But higher impact on budget would be at the time of 2014 parliament elections. And talking about stock market, it reacts on every major and minor event.
If the market risk premium were to increase everything else beign equal the value of common stock would do what?
Value of the common stock will go down.As market becomes riskier market participants adjust expected risk premium and start to demand higher returns, consequently they begin to sell stocks as they do not satisfy their newly adjusted expected risk premium. As a result stock price goes down.
What would 100 shares of wal-mart stock bought in 1970 be worth today?
Walmart stock first came on the market in 1970. If a person had purchased 100 shares of Walmart's stock in 1970, they would be worth around 35 million dollars today.
Do you think the nation would have experienced depression even if the stock market had not crashed?
Yes. The stock market crash did not cause the depression. Instead the economic crisis and the depression caused the stock market crash
What crash led up to the great depression?
Though there were smaller underlying causes, the big crash would be the Stock Market crash of 1929.
How would you describe the stock market crash?
When the stock market crashed many Americans faced problems. Problems such as homeless, being poor, jobless, ect. The crash was indeed very bad for America.
What would happen to the money market if the US did not honor its bonds?
It would probably crash
How was the 1929 stock market crash solved?
The crash ironically was solved by World War II. In retrospect if WWII wornt to happen many international powers would sink in to a longer and deeper depression as one they where already in.
How would a stock market crash affect aggregate demand and GDP?
AD is reduced and so is GDP
Which adviser would the president call in the event of a stock market crash?
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What was one cause of the stock market crash of 1929 and the Great Depression that followed?
There were many economic causes of the Stock Market Crash of 1929. Over speculation in the market was not regulated by the government. Some businesses were over-rated in value so that stock prices would rise. Many Americans purchased stock on credit. This was known as margin buying. Consumers often did not have the cash on hand when stock brokers called in the "loan." Banks were permitted to speculate in land and the stock market with little government regulations. High tariffs and war debts helped spread the economic depression world wide. The Stock Market Crash of 1929, while not the cause of the Great Depression, signaled the beginning of the Great Depression.
Why did people began to run to the bank to get their savings during the great depression?
they feared that when the stock marketcrashed their money that had been invested by the the banks in the stock market would also disappear as a result of the stock market crash in October 29 1929 also known as black Tuesday.
Will stock market crash in 2009?
Very good question. I am not sure if the market will crash or not, but I am for sure that the economy is in alot worse situation than most of us know. I would say the probability is certainly very high that a crash will occur. However, I am not sure if it will be in 2009 or 2010. Only time will tell.
Did the stock market crash on Black Tuesday?
Yes. the stock market crisis has a page on wikipedia, which is a very good site. I use it regularly for all sort of reasons. I would recommend looking up everything on there.
How do you use 'repercussions' in a sentence?
The repercussion of the 1929 stock market crash were felt all over the world.
