What was the major reason for the stock market crash?

Answer 1

There was over speculation in the Stock Market, which was not regulated.

Many Americans purchased stock on credit. This was known as margin buying. Banks were permitted to speculate in land and the stock market with little

government regulations. There was little, if any, government regulation of the stock market. Any company could claim their stock was worth so much and there was no way to check the validity of the worth of the stock.

Answer 2

There was over speculation in the Stock Market, which was not regulated by the government, either state or national. Companies often over estimated the worth of their stock in order to get good prices for their shares and convince the public that the company was sound.

Many Americans purchased stock on credit. This was known as margin buying. When the Market started its decline, many were unable to pay the loans called in by the stock brokers.Banks were permitted to speculate in the stock market with with the funds of its depositors.

Answer 3

The price of stock would be driven up by the robber barons due to large blocs of stock being purchased. Joe citizen would jump on the bandwagon and purchase as much as he could afford. When the stock was suitably inflated; the insiders would self their shares off and take their profits. Joe citizen, as usual, was left holding a bag of worthless stock. When this occurred often enough, the public began to lose confidence and this triggered a recessionary downward spiral which sunk into a depression. With Roosevelt's election, and the implementation of the New Deal, things began to turn around and people started getting back to work.

Regulations were put in place to curtail the depredations of the robber barons and protect John Q Public. Then Reagan began deregulation and we eventually got another near collapse of the economy. History repeating itself.

Answer 4

The lastest stock market turmoil started long before we saw the effects. The new technology of the internet promted a series of events that almost brought the whole financial system to a complete disaster. The internet trading that quickly spread like wildfire in the late 1990s distorted the prior century of the way equities stock prices moved. Making girations that had previously taken years in a matter of days. This distorted the American market perception and hightend a false euphoria. Once that had subsided the exchanges prompted by the need for more volume allowed the prices to be traded in penny increments and thus allowing no margins for the traders that kept orderly markets and eventually made the floor traders obsolite, leaving computers and black box programming to run rampid. Looking for another cash cow companies like Lehman and Bear turned to a con game of collaterallizing bunches of mortgage backed securities. The general public watched these companies and their counte parties like Countrywide give the American people mortgages without collateral o the appropriate ability to pay the mortgage. In the pusuit of the American dream the government allowed the deregulated indusrty to ruin the global markets for many years to come. Not to mention that companies such as Goldman continue to this day to manipulate the general publics IRAs and pensions by having a monopoly on execution of trades done through these massive deposits of the American peoples money through its vast groups of Hedge funds and money market funds and fund of funds, realize that a fund manager receives 20 percent of his profits plus 2 percent managing fee, that does not even hold a candle to the zillions they are making when Goldman or someone else sends them back .09 cents or more for the 2c that shows on the funds books. Someone better wake up now that the computers are so smart that bids are now cancelled in mille seconds causing a bottomless pit in the market in scary market conditions as the first flash crash has demonstrated only waiting for those poor individuals to at one point in a day to have a stock such as Accenture be left at less than a dollar. The system is broken the collateral of the American people has been stolen by these Vulchers never to be seen again until we get someone that understands this complicated series of continuing game playing at the expense of you.