1. Your Questions About Stock Market Crash Of 1929
Sharon asks…
10 facts about the 1929 stock market crash?
I'm supposed to write something for my English class about the stock market crash of 1929.
However, everything I read makes it extremely complicated. Can someone help me out?
Steve Winston answers:
If I were you I'd take what you can from this:
http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
and
http://www.britannica.com/EBchecked/topic/566754/stock-market-crash-of-1929
and
http://www.econlib.org/library/Topics/HighSchool/MonetaryPolicyandtheFederalReserve.html
this is a discussion of the effect of smoot-hawley on the stock market, specifically helping it sink:
http://www.econtalk.org/archives/2010/01/rustici_on_smoo.html
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2. Unfortunately it is somewhat complicated. Basically there was a bubble in the stock market
created by too much credit created by the Federal Reserve. This fostered an atmosphere of
easy money and speculation (similar to the recent housing bubble) in the stock market. Also,
smoot-hawley, and some other actions taken by President Hoover prolonged the problem.
Laura asks…
What are similarities between the 1929 stock market crash and the
sub-prime mortgage crash today?
I have to write a social studies essay on the similarities between the 1929 stock market crash
and the sub-prime mortgage crash.
I need 3 good points, and I have to expand on every one of them, so I would appreciate some
detail. Great! Thanks a lot
Steve Winston answers:
1. Both times, credit was easy to get.
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3. In both times, people could borrow easily.
2 Both time, there was rampant speculation which created bubbles
In the 20's, the speculation was in stocks, which led to a huge bubble in the stock market. In the
current period, the speculation was in housing, which led to a huge buble in the housing market.
3. In both cases, government regulation was weak.
In the 20's leading up to the crash, the two presidents were Warren Harding and Calvin
Coolidge, both of whom essentially had the belief that they should to as little as possible. In both
terms, the government regulation was weak, leading to poor decisions being made by the
banks.
In the current times, George Bush believed very strongly in minimizing government regulation.
Government regulatory agencies became do-nothing organizations, which allowed mortgage
bankers to essentially create fraud, openly encouraging loan applicants to lie on their
applications and developing products that they knew would kick people out of their homes and
wreak financial devastation.
Betty asks…
What were three influential Canadians that were involved with the
1929 stock market crash?
I have a culminating assignment to do on the 1929 stock market crash. We need to find three
people (with varying opinions and points of view) in order to explain the chronology stock
market crash.
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4. If anyone could help me think of any people (political candidates, activists, etc.) that were very
influential to the stock market crash, that would be great!!
Ps: They should be Canadian
Steve Winston answers:
Hmmmmmmmmmmm
David asks…
How the stock market crash of 1929 could have been prevented?
could the 1929 crash of the stock market been prevented? How? Did the government do
anything that could have caused the stock market to crash during 1929?
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5. Steve Winston answers:
This would be a book or an extensive thesis or dissertation.
No one is going to do that homework here.
I can tell you that the gov screwed up the economy and the market and kept the US in
Depression for raising taxes on individuals, and on business and created socialist programs that
if not addressed properly could create sever financial issues for the the USA in the future.
Frontline: $10 Trillion and Counting
http://www.pbs.org/wgbh/pages/frontline/tentrillion/
Note: the first part (of the above program) is Bush bashing with some good arguments. The last
part where they show the graphs and address actual projections of entitlements and not argue
solely on politics is what I would pay attention to.
In addition during the late 1920's, the FED made a series of pre-Depression interest rate
(increase) blunders just like it did in 1998-2000, and 2004-2006.
Ken asks…
Corporations during the stock market crash of 1929 and later
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6. depression?
Question for history class:
Many corporations survived the stock market crash of 1929 but failed during the ensuing
depression. Explain how this could happen.
I realize how they failed during the depression, but not exactly how they survived the stock
market crash. Thanks for any help!
Steve Winston answers:
The biggest reason companies didn’t fail when the market crashed is that stock price has
nothing to do with company success.
So just because a stock price falls by 70% does not mean that sales fell by 70%. During every
market downturn some companies have falling stock prices in the face of rising sales. The
depression is particularly acute because the lofty stock prices seen prior to the crash were due
to speculation and low margin requirements, not due to economic performance.
Carol asks…
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7. Was it the "Dead Cat Bounce" when investors jumped out of
windows during the 1929 stock market crash?
When investors jumped out of their windows on Wall street during the 1929 stock market
crash in the USA, was that the "Dead Cat Bounce" ???
If so, how high did the investors bounce?
Steve Winston answers:
Http://www.cracked.com/article_18487_6-ridiculous-history-myths-you-probably-think-are-true.ht
ml
Sandy asks…
How did President Hoover respond to the stock market crash of
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8. 1929 and the subsequent depression? What was the?
How did President Hoover respond to the stock market crash of 1929 and the subsequent
depression? What was the impact of his approach? What was the human toll of the Great
Depression?
Steve Winston answers:
President Hoover actually did very little during the time. He believed eventually the economy
would eventually fix itself. The great depression never started in America. It was already bad
throughout the world. However, back to your question. If you really want a human toll you'd
have to include WWII because the great depression was the driving force fascistshe facisits.
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