stock market crashed at 1929

The Stock Market Crash of 1929 was a pivotal financial event that marked the beginning of the Great Depression, a severe worldwide economic downturn.

Key Facts:

• Date: The crash occurred over several days:

  • Black Thursday: October 24, 1929

  • Black Monday: October 28, 1929

  • Black Tuesday: October 29, 1929

• Causes:

  • Speculative bubble: Many investors bought stocks on margin (borrowed money), inflating stock prices far beyond actual company values.

  • Overconfidence: The 1920s saw rapid economic growth, leading many to believe the market would continue rising indefinitely.

  • Lack of regulation: Banks and investors engaged in risky practices with little oversight.

  • Declining production and rising unemployment: Warning signs were ignored as market optimism continued.

• Impact:

  • Stock prices lost about 80–90% of their value over the next few years.

  • Banks failed, leading to loss of savings.

  • Unemployment in the U.S. rose to about 25%.

  • The crash and its aftermath affected economies around the globe.

• Long-Term Effects:

  • Led to major changes in financial regulation, including the creation of the Securities and Exchange Commission (SEC) in 1934.

  • Triggered widespread reform in banking practices through laws like the Glass-Steagall Act.