Question

why did stock market crash in 1929?

Answer 1

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Answer 2

The common thought is that is was liquidation of margin account that crashed the market. [ There were many folks who were buying stocks on very little margin back then, some at 10%. When the market began to fall, these folks could not meet their margin calls and the stock was sold by their brokers driving down prices more and causing more margin calls. Sort of a snow ball effect. It was actually somewhat more complicated than that. Short sellers were also causing shares to be sold into a vacuum also driving prices down. The head of JP Morgan bank was in France at the time helping to negotiate the end to WWI. There was a brokerage failure in London just prior to the crash. And last but not least buying just sort of dried up.

Answer 3

thanks girly

Answer 4

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Answer 5

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