The Stock Market Crash

Market Crash Dow Jones Industrial Average – an average of stock prices of major industries. climbing exponentially all year September 3, all time high 381 Prices fall slowly Wednesday, October 23 Dow dropped 21 points per hour

Darkness Black Thursday (October 24) Worried investors sell, sell, sell Government and business told people not to panic Black Tuesday – (October 29) 16.4 million shares were sold, compared with the average 4 million to 8 million shares daily Great Crash – collapse of the stock market Losses totaled $30 Billion

Ripple Effect Initially felt by only investors Effects on Market Risky loans hurt banks Consumer borrowing Bank runs Bank failures Savings wiped out Cuts in production Rise in unemployment Further cuts in production

Review What is the name of the day the stock market official collapsed? How did the stock market eventually effect the rest of the American economy?

Impact Great Depression – the most sever economic downturn in America’s history – which lasted from 1929 until the U.S. entered WWII in 1941 Workers and Farmers Factories closed Small businesses closed Farm prices fell further 1932: 12 million people unemployed (25% unemployment) GNP cut in half

The World All markets dependent on each other Ordered reparation payments from WWI Kept import tariffs and taxes high America stopped investing in Germany German market crashed hardest

Underlying Causes Unstable economy Overspeculation Government policies Industry over-produced goods Uneven prosperity Overspeculation Too many loans given to investors Government policies Too much money in circulation Rapidly took money out of market in 1929

Learning Activity What caused the initial start of the Great Recession? What caused the housing market to crash in the U.S.? What other industries were largely affected by the Great Recession? What was the U.S. response to the outbreak of Recession?

Closure What is the name of the average stocks on Wall Street? How did the crash of the stock market have a ripple effect on the American economy? How did the Great Depression in America effect, and possibly help lead to, the depression around the world?