BELLWORK 2/2 What was the Dawes Plan? What are the pros/cons of buying on credit? Explain Laissez-Faire economic policies. Why would the government support this? How do stocks work? THINKER: Do you have a savings account? Why do banks pay interest on savings?

How do stocks work? Companies are made up of stocks Stocks (shares): small portions of the company that can be bought and sold for a given amount of money. When a company does well (makes a profit), the stock increases in value. When a company does poorly (loses money), the stocks decrease in value. The Stock Market: the place where stocks are bought and sold.

Share Prices (12:15pm) AT&T: $41.04 Visa: $85.02 Chevron: $112.06 McDonalds: $123.55 Nike: $52.76 Facebook: $130.66 Apple: $128.17 Google: $818.73 These share prices are constantly changing……why?

STOCK VOCABULARY Speculation - Making high risk investments with the hope of huge returns. “Have to bet big to win big” Buying on Margin: You purchase a portion of the stock with your own money and borrow the rest Broker: person who buys/sells/trades stocks for customers

THE CASE OF CIRCUIT CITY Opened in 1949 as a retailer of brand-name electronics, computers, and entertainment systems. Joined the stock market in 1984 – fairly successful 2003: eliminated commission sales, 4000 employees laid off As of 2005, Circuit City held $1 billion in investments 2007: Management Turnover, 3500 more jobs lost 2008: CEO resigned, closed 155 stores, laid off 17% of workers 11/10/08: filed for Bankruptcy, $2.32 billion in debt 1/16/09: announced they were closing all stores

How does the stock market work? https://www.youtube.com/watch?v=F3QpgXBtDeo Be ready to discuss: advantages/disadvantages of owning stock What was the problem with large investors buying a huge portion of stock? What could go wrong?

The “booming” economy of the 1920’s was short lived when problems started to appear: Uneven Prosperity Tax cuts to wealthy Personal Debt Luxury items seem affordable with credit Playing the Stock Market Speculation and Buying on Margin Overproduction Originally high demand, but now, too much product Companies lost a lot of product and money

All these factors combined until October 29, 1929 when. . . . . . THE STOCK MARKET CRASHED!!!!

BLACK TUESDAY http://www.youtube.com/watch?v=RJpLMvgUXe8 Inflated stock prices began to fall at a rapid rate. 16.4 million shares were immediately sold Sold at much lower prices than for what they were bought= huge financial losses for sellers. Sends economy into a downfall. http://www.youtube.com/watch?v=RJpLMvgUXe8

Make a prediction…….. Now that the STOCK MARKET has crashed… Think about what effects this event might have on: People buying goods People producing goods Employment

Effects of the Stock Market Crash Lack of buying = decreased production = unemployment

Partner Discussion In 1929, America’s population was 120 million, but only 4 million held stocks. If this was such a small number, how and why did EVERYONE become affected by the Great Crash?

Ripple Effect of the Crash The Great Crash spread to the rest of Americans through the combination of 4 factors: Rise in unemployment: at height, 25% Consumer borrowing: not paying back credit or loans Risky loans hurt banks: business, broker, and consumer borrowing Bank runs: fearful that banks would run out of money, people rushed to make withdrawals from their accounts = loss of savings and bank failures

These results of the Great Crash triggered the most severe economic downturn in history. The Great Depression: lasted from 1929 until the U.S. entered WWII in 1941.

If the Great Depression started in the U. S If the Great Depression started in the U.S., how did this become a global economic depression?

Impact on the World Countries in the Americas and Europe depended on the U.S. markets for goods, investments and loans. Global economic system crumbled. U.S. couldn’t invest in European/American goods  Stop providing loans  German banks failed  suspended reparation payments  Allies stopped paying debts  Industrial production fell = FAILURE OF GLOBAL ECONOMY!

The Century, America’s Time: Stormy Weather You will now watch part II of the video lesson which focuses on the causes/effects of the Great Depression. Take notes on your worksheet!

BELLWORK: 2/3 As you know, the U.S. emerged from WWI as the world’s leading creditor, investor, and wealthy nation. This caused countries within the region to become more linked and dependent on the U.S. Analyze the advantages and disadvantages of this reliance on the US economy.

Evidence vs. Analysis practice Today you are going to embrace your inner-historian! The class will be divided into three groups. Each group will be given an envelope of pictures pertaining to someone’s way of life. It is up to your group to analyze the evidence in order to reach a conclusion. Try and be as specific as possible! Each group must turn in one paper that explains the evidence, your conclusion, and the analysis of evidence that helped reach your conclusion.

Evidence vs. Analysis practice You must also give a brief presentation to the class about your person. Make sure to use proper analytical phrasing! Consider the following: Gender? Time Period? What they do for fun Culture What they eat and how they obtain it Make sure you’re not only addressing these points, but also explaining HOW you know this

For example……. The size, shape and material of this helmet indicates it was worn by a knight in Medieval Europe. The gold cross-like design on the helmet proves this knight fought for a Catholic country – most likely one in Western Europe. Since the knight fought for a Catholic country, this would suggest these helmets were worn by soldiers during the Crusades. Since women were not allowed to fight, it is clear that the owner of this helmet was a male.

Part B Info!