Crash of Stock Market 1929

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The Stock Market Crash of 1929 The nineteen twenties was a time in America’s history of an unreal amount of success. The stock market was going through the roof, stocks doubling in price, prosperity was everywhere, and America seemed to have the formula for exceptional success. As success stories continue to spread, people became hungry for more power. Blinded by greed and flashy items, professionals that worked for large firms used money to manipulate the market. In the film series, American Experience, PBS explains many of the events that occur before the Crash of 1929. The Narrator further explains, “ [that] large firms would influence other investors by bribing reporters to release false information about specific stocks” (Crash). As the information travels, small investors would squander their life savings to buy stock on the rise and buy basically on the margin. Essentially, large firms would rig the market for their own personal gain and watch small investors lose everything. Three causes of the stock market crash of 1929 were weaknesses in the banking system, over extending credit, and pure negligence. Some of these same weaknesses could be observed prior to the Recession of 2008. Prior to the crash of 1929 and the Recession of 2008, there was a rapid growth in bank credit and loans. In the mid 1920s, consumers’ buying power increased and people began to experiment with different products. In order to buy many of these products, consumers relied heavy on cheap credit to increase their spending power. Similar to buying products on credit, people would use their credit to buy shares. Buying stocks with credit is commonly known as buying “on margin.” In his article, “What Caused the Wall Street Crash of 1929?”, Tejvan Pettinger explains how series of events contributed to the Crash of 1929. In his article, Pettinger further explains the creation of the
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