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Wall Street Crash 1929 Stock Market Crash

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Wall Street Crash of 1929 Definition Glossary of Stock Market Terms - Wall Street Crash 1929

Wall Street Crash of 1929 : The 1929 Wall Street Crash refers to the dates in late October of 1929 during which the American stock market crashed, causing widespread panic through the population and ultimately solidifying the beginning of The Great Depression.
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Prior to October of 1929, America experienced economic growth and prosperity, experiencing what many now call the "roaring twenties". Although the stock market was known to fluctuate with instability, most economists thought the market had reached a plateau that was relatively permanent. This period of prosperity was known as a bull market.

After a period of declining stocks in early October, investors saw moderate recovery in the market but confidence was fragile. This decline helped lead to the ultimate market crash on October 24, 1929, otherwise known as Black Thursday. On this day more than 12 million shares were traded, fueling public panic.

On Friday, leading financiers bought shares in "blue chip" stocks such as steel for inflated prices to keep the market stable, a technique used to help the market recover from decline in 1907. Although the purchases helped maintain a steady market on Friday, public panic set in again over the weekend and stocks crashed again on Monday and Tuesday of the following week (October 28th and 29th) and became known as Black Monday and Tuesday.

Many Americans had borrowed money in order to invest in the stock market and lenders were known to let people borrow up to 2/3 of the cost of their stock. When the market crashed, individuals were unable to pay back their loans, causing many banks and institutions to go bankrupt. Consequently, these lenders were unable to pay back savings or loans they had made, causing a chain of events that led to the demise of many lending institutions and bankruptcy for thousands of people.

The market experienced moderate recovery but remained low due to lack of investments and poor moral. As a result, America fell into The Great Depression during which much of the population experienced levels of poverty. Some economists believe the 1929 Wall Street Crash happened as a result of an economic bubble that would have eventually caused the Depression. Others, however, feel the crash caused the economic downfall of America in the late 1920s.

Also called : Black Tuesday, Black Thursday, Black Monday, The Crash of '29, The Great Depression.


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