Stock Market Crash

In the cities, people were making fortunes in the stock market, but suddenly, it crashed.
Economists had claimed a new plateau of prosperity had been reached, but their predictions were incorrect.

Economists believed that America had reached a permanent high point.
During the .com boom of the early 2000s, some economists made similar claims.
The speaker recalls owning a small share in a cell phone company that tripled in value.
People made significant amounts of money, and day traders profited substantially.
The speaker wrote a story for a new .com newspaper and received $400.
Companies were throwing money around, creating a crazy environment.

Automobile sales and department store revenues declined sharply.
Trial separations were increasing across the South and West.
Despite these indicators, optimism continued on Wall Street, with the Dow Jones average reaching its peak on August 27, 1929.
Buyers were desperate not to miss out, camping out near the stock exchange.
The American economy began to cool in 1928. The Wall Street economy disconnected from the real economy, leading to a speculative bubble.

Bernard Baruch's story: When his shoeshine boy gave him stock tips, Baruch knew it was time to sell.
Economist Roger Best warned of an impending crash, but most experts dismissed concerns.
One expert claimed stock prices had reached a permanently high plateau.

On Wednesday, October 23, 1929, panicky selling drove down blue-chip stocks.
The following morning, fear turned to panic, leading to the unloading of margin accounts.
Stock prices plummeted, spurring further sell orders from terrified speculators.
The value of companies decreased significantly.
People gathered outside the stock exchange.
A consortium of bankers pumped hundreds of millions of dollars into the stock exchange to stabilize the market.

Stocks lost value.
During the tariff announcement, the stock market declined.
In February 2009, the stock market tumbled rapidly, leading to the collapse of Lehman Brothers.
Students lost their jobs, and families lost their houses. Some families had to live with students.
The government bailed out the banks, except for Lehman Brothers.

Bad loans were bundled and sold, leading to huge profits.
The housing market experienced significant growth, with the belief that house prices would only increase.
The speaker avoided buying a house due to her husband's skepticism about the market bubble.

Most crashes tend to occur in the fall due to human psychology.
Speculation seems brilliant in the summer but less so in the fall.
Too many people selling at once causes the market to drop, triggering more selling.

Stock prices collapsed under panic selling.
Brokers fought and screamed, with no computers to assist.
16 million shares traded, a record not broken until 1969.
The market lost $14,000,000,000$ in value, with total losses exceeding $30,000,000,000$ , ten times the annual budget of the United States.

The speaker discusses the impact on her grandparents' generation, who grew up during the Great Depression and fought in World War II.
Her grandmother always saved every bit of food.

Farming struggled in the 1920s due to overproduction after expanding to feed Europe during World War I.
Soil exhaustion and drought led to the Dust Bowl.

Gambling mentality in the market
The speaker explains how people get nervous when they notice others selling. The psychology involves: pump and dump, rug pull.
Selling drives prices down.

Modern regulations exist to prevent market manipulation.
Borrowing money to invest is possible.
The speaker refers to Hakuto coin and rug pulls.
The ability to borrow money amplifies both gains and losses in the stock market.