Why Did The Wall Street Crash Happen?


4 Answers

John Profile
John answered
According to the special I just watched it was caused by market manipulation and speculators.when it happened the first time.according to what they said some companies were so huge that they could cause stock to rise or fall just by buying or selling stock..they would by a stock and when it rose to it's optimum price for them they would sell leaving all the other investors holding worthless stock.almost identical to what has happened to today's market.companies falsifying sells records and profits to make their stock worth more than it actually was.then they sell all their stock and make a bundle while their investors lose a special on pbs about the stock market crash. They show it man was so powerful that when he went to work the police department would make sure all the street lights were green for him all the way to and from work.
Richard Marsden Profile
Richard Marsden answered
On Black Thursday (24th Oct), share prices on Wall Street fall faster and lower than any other time before or since. Stockbrokers started selling shares in large numbers. By midday shares in even the strongest companies had gone down dozens of points. Bankers tried to stop the fall in prices by spending $40 million each on buying shares, to encourage other people to buy them instead of selling them. This began to work, but certain rumours put people off.

Over the weekend, bankers were demanding a repayment of their money from share buyers who got loans from the bank to pay for them. To repay them, the bankers had to ask their customers for more margins. The only way to do this was to sell more shares.

On Black Tuesday (Oct.29th) there was a mad scramble to sell shares at any price. Panic-stricken brokers and investors sold over 16 million shares during the day. The average price of shares fell 40 points and shareholders lost a total of $8000 million. The stock market did not recover from this. Share prices kept on dropping until they reached rock bottom in November 1929. The crash led to sudden bankruptcies, less demand, unemployment (12m), the closure of 5,000 banks and factories leading to general poverty.
d ds Profile
d ds answered
The Wall Street crash occurs in 1929 and is also known as the black Tuesday. During that time, there was no separation between investment and commercial bank and the same bank could perform both these functions. What happened was that the banks gave a large amount of loans to the various companies without considering their default risks and these loans went bad. As these commercial banks also performed investment functions, to recover their money, the banks issued securities of the defaulting companies and sold them to the general public. In this way they recovered their own money but they transferred the risk to the general public. These companies were already in a very bad state and when they defaulted, and as a result of these actions, the whole market went into a recession as people became cautious about spending money.  Due to an aftermath of this, the Glass stegall act was introduced that separated commercial banks from investment banks.
Anonymous Profile
Anonymous answered
Due to bad preserving

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