The Stock Market Crash of 1929 occurred after an economic boom that led everyone at the time feeling as if there could be no wrong. "A crowd gathered outside of the New York Stock Exchange on Wall Street, stunned at the downturn," according to the article. "Rumors circulated of people committing suicide." People lost everything. They had put so much faith into their investments that when the crash happened, people had nothing to go back to.
The major differences, according to a user on yahoo website (I know. Not the most reliable source, but he sounds like he knows what he's talking about. Plus, I couldn't find many other answers other than yahoo answers), is the Federal Reserve "failed to react in 1929. In the 2008 crisis, the Fed reacted with 'quantitative easing.'"
Also, in 1929, people would buy "on margin," which referred to someone paying for a small percent of the stock, while loaners would pay the rest. If the loaners felt uncomfortable with the drop of a stock, they could demand that the person pay back the money. When the market crashed, no one had the money to pay back the loaners.
In 2008, increased living expenses meant mortgages and interest rates began to double or triple. This led to many not being able to pay to keep their houses.
Both had the same outcome though. Many lost their savings. Many lost their jobs and their homes. Hopefully we can get out of the slump again.
http://answers.yahoo.com/question/index?qid=20100517135817AA3niDg
http://en.wikipedia.org/wiki/Stock_market_crash#The_Crash_of_2008-2009
http://history1900s.about.com/od/1920s/a/stockcrash1929.htm
No comments:
Post a Comment