The Stock Market Crash Angela Brown Chapter 12 Section 2 1
Stock Market 1928 Dow Jones Industrial Average - average of stock prices of major industries u March 1929 risen another 122 points u September 3 alltime high of 381 u 2 http: //www. dowjonesstockmarket. info/dow_jones_stock_market_results. jpg
http: //leduc 998. files. wordpress. com/2008/05/graph 1920 -1929. gif 3
The Market Crashes Prices for many stocks soared far above their real value in terms of the company’s earnings and assets. http: //www. stockbreakthroughs. com/ images/adcopy/1929%20 Stock%20 Crash. gif 4
Black Thursday Stocks fell slowly. u Some stockbrokers called in loans – others continued to lend u Dropped 21 points in an hour Oct. 23 u Oct 24 investors began to sell – stock prices fell u http: //blacktuesday. info/images/Black%20 Tuesday/Black_Tuesday_2. jpg 5
Business, political leaders told country not to worry. u $3 billion paper loss on the stock exchange in a single day. u http: //lphs. k 12. ca. us/rm 1/online/hotpotatoestav/TAV 10 -1/_Stock_ market_crash_1929. jpg 6
Black Tuesday To stop panic, a group of bankers pooled money to buy stock. u Stabilized prices for a few days u Investors raced to get their money out of the stock market. u http: //static. howstuffworks. com/gif/ government-control-stock-market-crash-1. jpg 7
u Black Tuesday, Oct. 29, 16. 4 million shares were sold, compared with average 4 million to 8 million shares per day = GREAT CRASH u Continued to fall November 13 198. 7 from 381 - $30 billion total losses u Business Cycle – periods of economic growth, then contraction 8
From Riches to Ruin u Took time for people to recognize the extent of the disaster caused by the crash. u People whose entire wealth did not depend on the stock market, life went on much as before. u Brokers and banks called in loans – people did not have cash to pay them www. britannica. com 9
The Crash Affects Millions u 1929 4 million of 120 million U. S. population had invested in the stock market u soon affected millions had never owned stock u Great Depression – a severe economic decline that lasted from 1929 until the U. S. entered WWII in 1941 (12 years) 10
http: //www. internationalist. org/wallstreet 1929. jpg Americans lost jobs, farms, homes u Ripple effect produced world turmoil for years u 11 http: //www. picturehistory. com/images/products/1/6/1/prod_16139. jpg
Impact on Workers and Farmers u 1931 Ford shut down Detroit automobile Factories – 75, 000 out of work u European workers had government unemployment insurance u 1932 ¼ labor force out of work (12 million) 12
The Gross National Product (GNP) – total value of goods and services a country produces annually ($103 billion in 1929) u 1933 GNP 56 billion u http: //www. downtownexpress. com/de_76/wall. gif 13
Banks Close Banks exist on interest earned from lending out deposits. u People rushed to withdraw money. u 5500 banks failed. u 1933 money from 9 million savings accounts vanished. u http: //cache. eb. com/eb/image? id= 1017&rend. Type. Id=4 14
Impact on the World u International banking manufacturing, trade made nations interdependent. u Global economic system crumbled. u U. S. had insisted France, Britain repay war debt. u Import taxes high = hard for European nations to sell goods in U. S. 15
http: //www. j-bradford-delong. net/Graphics/gif_files/Page. Mill_ Resources/image 11. gif 16
u Allies relied on Germany’s reparations for payments. u Depression – investments fell off – Germany suspended reparations – Allies stopped payments u Europeans couldn’t afford to buy U. S. goods = downward cycle in global economy 17
Causes of Depression Overspeculation u Speculators bought stocks with borrowed money, pledged those stocks as collateral to buy more stocks. u Collateral is an item of value that a borrower agrees to forfeit to the lender if the borrower cannot repay a loan. u Stock market boom was based on borrowed money and optimism instead of real value. u 18
Government Policies u Federal Reserve System, which regulates the amount of money in circulation, cut interest rates to spur economic growth. u 1929 limited money supply to discourage lending. u Too little money in circulation to help the economy recover. 19
http: //www. black-thursday. net/img/cover 0. png An Unstable Economy National wealth was unevenly distributed (saved or invested rather than buy goods). u Industry produced more goods than could sale. u Farmers and workers not part of boom. u Unevenness made rapid recovery impossible. u 20
Скачать презентацию The Stock Market Crash Angela Brown Chapter 12
ac0d8c516350c70a19e0509ea27ae83d.ppt