1. Your Questions About Stock Market Crash
Lizzie asks…
What does a stock-market crash mean to the average person on
the street?
I am in the military and have a pretty secure job, I have a little put into a retirement fund. I'm
really not being affected by any investments so what does a stock-market crash mean to me?
Steve Winston answers:
It can affect a few things... If you are wanting to sell your home you might have a hard time
finding a buyer who will be approved for a loan. If you are trying to buy a home you might
experience difficulty obtaining a loan. In a nutshell, getting credit will be increasingly difficult.
Everything from a car to a credit card. Some companies get part of their operating money from
investment companies. For instance, the place your friends or family work for might use lending
as a means to pay them a salary. These companies can start to be denied these types of
services and thus will not be able to pay their employees. Layoffs, increased unemployment,
etc. On the flip side, it can be a great time to invest in the stock market since everything is "on
sale" at a discounted price. Historically the market eventually goes back up and those that
bought lots of shares at a low price come out wealthy when those cheap stocks become
valuable again. Hope some of this info helps. By the way, thank you for serving our country!
1/7

2. Mary asks…
What was the relationship between the stock market crash and the
great depression?
A) The stock market crash caused the depression.
B) Falling prices meant that the federal government had no choice but to raise taxes, which
turned a temporary slump into a depression.
C) Falling stock prices made investors overly confident and willing to make high risk
investments.
D) Falling stock prices forced investors to default on loans, which in turn forced banks to fail.
Steve Winston answers:
D
2/7

3. John asks…
How did the stock market crash in the great depression ?
What does it mean when the stock market crash and why did it crash. how did they fix it.
Steve Winston answers:
It crashed because of what was called "buying on margin".
The first thing that must be realized was that, before the crash, the market was on one fantastic
upswing. So, people would invest with a broker "on margin", meaning that they would say, pay
the broker $10 for a stock worth $100, and then, in a short time, sell the stock when it went to
say $150, making a huge profit per share with an investment of only $10. But, when steel went
bust, the market fell, and the margins were called in. But most could not pay up, so the market
went down even more.
3/7

4. Sandra asks…
How would you explain to someone that a recession or stock
market crash is not the failure of capitalism?
How would you explain to someone that a recession or stock market crash is not the failure of
capitalism? With the stock market crashing in the past couple of months, unemployment
soaring, and the Big 3 automakers on the verge of bankruptcy I've heard more than one person
comment that it's all proof that capitalism is outdated or never worked very well. How would you
explain to them that capitalism does work?
Steve Winston answers:
Yeah, but when did the economy officially transition from recession to royal fustercluck
4/7

5. William asks…
How is Great Gatsby related to the stock market crash?
I already read the book. My topic is the cause of the stock market crash of 1929. But i don't
how it is related to the book. Any helpful advices would be appreciated.
Steve Winston answers:
In the book, the rich end up surviving and thriving while the poorer ones who work hard end up
being destroyed (Gatsby).
Same with Stock Market.
Steven asks…
5/7

6. How would this have affected the 1929 stock market crash?
If someone were to travel back to 1929 and tell the whole world the stock market was going to
crash and everyone took their money out f the stock market. Would this have prevented
people from losing money or some how make the economy worse? Would the economy be
different today? How? Sources?
Steve Winston answers:
Have you even bothered thinking about this?
1. Stock markets crash when everyone wants to sell and no one wants to buy. How is telling
people that the market will crash going to help prevent a crash?
2. You think it wasn't clear that the stock market rise in 1929 was a bubble? From 1921 to 1929,
the Dow Jones went from 60 to 400. That's more than 20% per year. That kind of growth can't
go on indefinitely, and anyone who believes it can is willfully ignoring reality.
Http://www.stock-market-crash.net/1929.htm
3. When were you planning on doing this? Earlier in October of 1929? Earlier in 1929? Earlier in
the decade? How were you going to get people to believe you?
If you had gotten the market to crash much earlier - say 1925 instead of 1929 - the results
would have been much better. The depression that followed might have been a minor
recession; it is even possible that there would not have been a world war.
Http://en.wikipedia.org/wiki/Causes_of_World_War_II#The_Great_Depression
But how would you get people to believe you? Or to care? In the U.S. People were saying the
housing market was in a bubble as early as 2001. By 2005, most economists agreed. Yet the
6/7

7. Fed deliberately chose to do nothing until the bubble burst. And people kept buying till the very
end.
Http://www.businessandmedia.org/specialreports/2005/mediamyths/mediamyths.asp
Powered by Yahoo! Answers
Read More…
7/7
Powered by TCPDF (www.tcpdf.org)