Stock Market Crashs Of 1929 And 1987

Essay, Research Paper

The Stock Market Crashes of 1929 and 1987

The stock market crash of 1929 occurred over a period of time that was the beginning of what is called the Great Depression. Everyone wanted to invest their money in the stock market. People thought that the stock market was the perfect place to make money.

The Stock Market Crash began on Oct. 24,1929 as stock prices were already dropping. On this day approximately $15 billion dollars was lost and many lost their life savings. Companies stocks prices dropped and banks also lost all their money because it was loaned to buy stocks and the people were unable to repay the banks. The Stock Market Crash was a disaster.

The stock market was not always this unstable as it was in 1929. In 1928, the prices of the stock market rose 40%. This was the raise in stocks that got the attention of millions of people across the nation. Everybody started investing in the stock market through banks, companies or directly. It was not just that people invested too much money, the stock market was manipulated. The prices were sometimes set according to the wanting of bigger investor, which would hurt the smaller investors a lot.

Borrowing money became very popular during this time. People needed money to invest in the stock market. Many borrowed money, either from banks in order to buy stocks. The investor lost a

ll their money and could not repay the banks. The lender could never be repaid because the investor lost all their money, because there was no place where they could get it back. In 1929, the stock prices kept going up and up and were so high that people started to sell all their stocks and the prices dropped sharply on October 21. People were losing money rapidly. There were a few people who did not lose their money because they were smart and sold all their stocks before the prices dropped. Many people eventually lost all their money in banks stocks that were invested in the stock market.

The Stock Market Crash of 1929 marked the end of an era, and the beginning of the Great Depression. People lost lots of money, their jobs and homes.

On October 19, 1987, the largest stock-market drop in Wall Street history occurred. It was called “Black Monday” when the Dow Jones Industrial Average plunged 508.32 points, losing 22.6% of its total value. That fall far surpassed the one-day loss of 12.9% that began the great stock market crash of 1929 and foreshadowed the Great Depression. The Dow’s 1987 fall also triggered panic selling and similar drops in stock markets worldwide. Unlike in 1929, the market soon rebounded after the crash, posting record one-day high gains of 102.27 the next day and 186.64 points two days later. By September 1989, the Dow had regained all the value it had lost in the crash.