http://www.pbs.org/wgbh/americanexperience/films/crash/player/ http://www.youtube.com/watch?v=ccNilnpvbJg

Brainstorm and write down all the pros and cons of government regulation that you can think of

Warm-up: write answers OR discuss with your partner What is the English translation of laissez faire? Define laissez faire Give one good thing and one bad thing that happened from laissez faire in the 1920s

Today’s episode: The Stock Market LT 2: Causes of the GD Great Depression Today’s episode: The Stock Market LT 2: Causes of the GD

What do you know about stocks?

Stock Market Basics Stock – unit of ownership in a company Stock market – a place for trading stocks Goal is to sell stock for higher value than you paid for it

DEMAND Stock market basics What makes stock value go up and down? Stock value goes UP if demand for company’s stock goes up Stock value goes DOWN if demand goes down

What is determining whether people buy or sell the stock? Not how well the company’s doing

What can you get with your money in the market? Loss Money lost from a fall in stock value Profit Money gained from a rise in stock value

You must SELL your stock to actually get a profit or loss, otherwise your money’s still in the market For example…

Explain

Two types of markets…

Two types of markets BULL market – market where most stock values are going UP (remember: a bull’s horns go UP)

Two types of markets BEAR market – market where most stock values are going DOWN

Explain

An Intro to the Market Stock Market Rap Intro to stock market crash readings, basic: http://pbskids.org/bigapplehistory/parentsteachers/business_lesson7.html http://www.youtube.com/watch?v=GnJCOof2HJk&feature=related

Pie. Building.

Warm-Up Write a sentence using the following words: Stock Profit Loss Bear OR bull market

Risky stock market practices Margin buying Buying stocks with loans Risky b/c loss can lead to debt Why might this be risky?

Margin call – if stock value drops below a predetermined minimum requirement, you get a call to put in more $$$ or else you must sell for a loss Movie released 2011 Wiki: Margin buying is buying securities with cash borrowed from a broker, using other securities as collateral. This has the effect of magnifying any profit or loss made on the securities. The securities serve as collateral for the loan. The net value, i.e. the difference between the value of the securities and the loan, is initially equal to the amount of one's own cash used. This difference has to stay above a minimum margin requirement, the purpose of which is to protect the broker against a fall in the value of the securities to the point that the investor can no longer cover the loan.

Risky stock market practices Speculation Buying and selling stocks in a short period of time to make a quick profit Risky b/c involves guessing about stocks’ immediate future What happened in the past may have no impact on what happens in the future; you don’t know what will happen to the kangaroo, anything could affect her

Examples of different stock markets Dow Jones, New York Stock Exchange (NYSE), S&P 500

What does the market look like? http://finance.yahoo.com/lookup

Closure Get it, sort of, don’t Around the room

Stocks plummet after dissing Jersey Shore How might the stocks have plummeted? (2 ways)

CHALLENGE: In no more than three sentences (no run-ons), explain what we’ve learned about the stock market so far. You may choose to use the images below… Pie. Building.

Closure Share with the person closest to you two things you learned today and one question you have about the stock market

Let’s make some moolah http://www.smartstocks.com/login.html

THE GREAT DEPRESSION Today’s episode: The Party’s Over – The Crash of ’29 LT 2: Causes of the GD

Laissez faire – hands off Whose hands? Off what?

Warm-up: write the blanks 1. _________ – unit of ownership in a company 2. _________________ – a place for trading stocks 3. Goal is to sell stock for ________ than you paid for it 4. The ___________ for a stock makes its value go up and down 5. __________ – money gained from a _________ in stock value 6. __________ – money lost from a ________ in stock value 7. ______ market – market where most stock values are going up 8. ______ market – market where most stock values are going down 9. Margin buying – buying stocks with ________________________; risky 10. _____________ – buying and selling stocks to make a quick profit; high risk but chance of high reward

Boot up your Netbook

Warm-up: explain whether the statement below is true or false People should buy in a bear market.

Warm-up WRITE a sentence using 3 words on the word wall relating to laissez faire

Warm-up: Discuss with the person closest to you Our current economy is not very good. How do we know we are not in a recession? Use the root word of recession to explain what it is. What are the three parts that make up an economy?

THE GREAT DEPRESSION Today’s episode: The Party’s Over – The Crash of ’29 LT 2: Causes of the GD

Brain stretch STOCK MARKET – WITHOUT your notes, do your best to define the following terms in your scratch paper section: Stock d) margin buying Profit e) speculation Bear market LAISSEZ FAIRE – True/False. Correct the false. Laissez faire leads to economic growth through most of the 1920s. Under laissez faire, the gov’t spends more $ to solve economic problems. Secretary of the Treasury Andrew Mellon raises taxes to put more money in the private sector. An argument against too much tax is that it will keep people from working hard.

Why might this picture make sense?

What’s different?

he Dow Jones Industrial Average recovered, closing with it down only 6 he Dow Jones Industrial Average recovered, closing with it down only 6.38 points for the day; however, unlike 1907, the respite was only temporary. The trading floor of the New York Stock Exchange in 1930, just six months after the crash of 1929 Over the weekend, the events were covered by the newspapers across the United States. On Monday, October 28, "Black Monday",[9] more investors decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38 points, or 13%. The next day, "Black Tuesday", October 29, 1929, about 16 million shares were traded, and the Dow lost an additional 30 points, or 12%. It eventually falls 89% by 1932

The Crash of 1929 PBS YouTube

The Dow Jones market loses 50% in the crash

Closure Answer the “After the video” question on your handout

How a recession occurs Good economy People overspend, go into debt People buy less Businesses overproduce Businesses lose money Cut production, unemployment rises People invest less in stocks How a recession occurs

Risks and Rewards

Stock Market Vocab Review 1. _______ – unit of ownership in a company 2. ______________ – a place for trading stocks 3. Goal is to sell stock for ______ than you paid for it 4. The _______ for a stock makes its value go up and down 5. ________ – money gained from a rise in stock value 6. Loss – money lost from a ______ in stock value 7. ______ market – market where most stock values are going up 8. ______ market – market where most stock values are going down 9. Margin buying – buying stocks with ____________________; risky 10. _____________ – buying and selling stocks to make a quick profit; high risk but chance of high reward Examples of different stock markets: Dow Jones, New York Stock Exchange (NYSE), S&P 500