Stock market crash of 1929 causes?

Answer 1

One of the biggest causes was uncontrolled trading on margin.

Trading on margin means borrowing money to buy stock, and it's very risky even today, when we have good controls on how much of your portfolio can be bought with borrowed money. (Short answer: you can borrow up to 50 percent of the value of the stock you own...if you have $10,000 in your margin account you can buy up to $20,000 worth of stock. Margin is pretty complex.) In the 1920s, you could borrow far more...so much so, that when the market crashed in 1929 people had borrowed more money to buy stock on margin than there was money to borrow. (A similar thing happened with derivatives in the Bush era: at the peak of the era, the notional dollar value of all outstanding derivatives was five times that of all the money in the world.) When the Stock Market started to contract and brokers started making "margin calls" - where the broker calls the investor and tells him to put more money in his account right now - the margin calls went unanswered because the money needed to meet all those margin calls didn't exist in the economy. This caused the stock market to collapse, taking the broader economy along with it.

Answer 2

The cause of the crash of the share market in the year 1929 was the big recession.