Stock Market Crash of 1929 Notes

BLACK MONDAY October 28th, 1929

• The stock market crash of 1929 was a four-day collapse of stock prices that began on October 24, 1929.
• The crash lost the equivalent of 396 billion in today's currency.
• It was more than the total cost of World War I.
• It destroyed confidence in Wall Street markets and led to the Great Depression.

The Stock Market Crash of 1929

• The crash is likened to a big hole in a canoe, emphasizing that even if some water is scooped out, the damage is already done.

The Stock Market Crash of 1929 - BEFORE

• The 1920s were referred to as the "Roaring Twenties."
  • Mass consumerism, low unemployment, and high industry production characterized the era.
• The U.S. stock market grew 6x from 1921-1929.
• Regular citizens were starting to invest their money, confident from almost 10 years of growth.
• The stock market reached a peak on September 3, 1929.

The Stock Market Crash of 1929 - REASONS FOR THE CRASH

• The growth of the Market was not sustainable; people were cautious and started to sell.
• Companies lost value as their stocks were sold.
• People who were unlucky enough to not secure their investments lost VAST amounts.
• Industries could no longer afford to pay their workers.
• Unemployment, homelessness, and hunger became rampant.
• Some even lost their lives.

Stock Market Simulation

• In the stock market simulation, investors became worried about the reliability of their devices and the systems that use information technology (banks, businesses, even the stock market itself) due to the increasing technological threat from the solar storms.
• As a result, investors started to pull their money out of these companies.
• This caused other investors to do the same, leading to a downward spiral.
• The solar storms ruining Earth’s technological systems was not the CAUSE of the crash, but it was the CATALYST that started the downward spiral.
• This was a lesson about both the benefits and potential dangers of investing.
• When it is done well, it can be prosperous. When it goes wrong . . .