The stock market crash of 1929 and what it used to be still stands today as one of the more historic financial crashes in US history. Many historians look at the crash and can confidently declare that it was because of a number of actions and no small amount of inaction that led to those four days creating the beginnings of the Great Depression that would quickly follow.
Although the economy eventually recovered, the mistakes of the Great Depression haunted them back. In 1987, the stock market again crashed. The crash was so disabling that the Dow Jones suffered the largest single-day loss in the stock markets history.
The government and the industry have attempted to set up measures to avoid such a large-scale crash since then. Now, the stock market is an essential part of the worlds economy. Proper safeguards and systems to reduce or prevent another stock market crash are of utmost importance.
Kicking off on Thursday, October 24, 1929, the following Friday, Monday and Tuesday would come to be called the four black days. This means that Black Thursday preceded Black Friday. These preceded Black Monday and Black Tuesday. Both Monday and Tuesday dealt hammer blows to an already mortally wounded stock market. The lack of concrete action those four days hurt the stock market for almost a decade. Panic and alarm had set in by late Tuesday. The next day saw a run on the shore that was historic in its proportion. Much of the blame can be laid at the feet of leaders on Wall Street and in the stock markets, as a question of fact.
Wall Street Crash of 1929
It was over a month before some type of rational thought could be restored to the acts of the market, though it took several years after that to return to normal. There was a great deal of wealth being created and much exuberance within the markets themselves during the decade preceding the crash. Many people who had no business investing were out there speculating on shaky stocks and extending themselves too much. Risky stocks were the preference over safe vehicle like savings bonds and the like. The markets eventually had to go down and they did, beginning October 24.
The serious plunge in stock prices began that day and just could not be stopped. Most historians and economists maintain that a shortage of concrete action on the part of Wall Street leaders and indeed the federal government helped exacerbate the fall in stock prices. In fact, some historians say that such an action created a forest fire during the four days of stock market price declines. There was no real regulation of the markets back then, though that is different today.
The stock market crash of 1929 also helped contribute to the consequences of what came to be called the Great Depression. There is some debate as to what came first (the Great Depression or the stock exchange crash). However, there can be no denying that the incident itself was the single most memorable crash of a US stock market in the nation’s history.
Today we can learn much from the great stock market crash of ’29. There are similar parallels with the great crash and our current economic circumstances. It isn’t likely that we will experience anything as severe as the great depression. However, it is important to learn from our past mistakes. Unfortunately, human nature’s what it is, so we continue on without care, but perhaps, just maybe we can these great events and look to a bright future.