The immediate post World War 1 era, was a time of financial prosperity. The US Government began promoting Liberty Bonds, which was the first experience for many Americans of investing, and lots of investors put their money into savings bonds, and/or, company stocks. Also the US Government, gave loans to Europe to repair all of the wars damage.
But after Europe finished repairing from the war, there was too much supply, and too little demand. That’s what started the 1929 Stock Market Crash. The crash lost the equivalent of $396 billion today, which is more than the total cost of World War 1. The 1929 Stock Market Crash destroyed confidence in Wall Street and also started the Great Depression.
The Dow Jones opened at 305.85. It than immediately fell 11%, signaling a "stock market correction." Wall Street bankers feverishly bought shares to prop the market up. Their strategy worked. By the end of the day, the Dow Jones was down just 2%.
The positive momentum continued. Also, the Dow Jones rose 1% to 301.22. On Saturday, a short trading day removed that gain. The Dow Jones closed at 298.97.
The Dow Jones fell 13% to 260.64, which is considered a Stock Market Correction.
The Dow Jones fell 12% to 230.07. Panicked investors sold 16,410,310 shares.
“The day before Black Thursday, The Washington Post headlines blared ‘Huge Selling Wave Creates Near-Panic as Stocks Collapse,’ while The Times screamed ‘Prices of Stocks Crash in Heavy Liquidation.’ By Black Thursday, panic had set in for the worst stock market crash in history." says https://www.thebalance.com. The 1929 Stock Market Crash followed an asset bubble.
Since 1922, the stock market had gone up by almost 20% per year. Everyone invested. The crash wiped people out. They were forced to sell businesses and cash in their life savings.
March 1929: The Dow Jones dropped, but bankers reassured investors.
August 8, 1929: The Federal Reserve Bank of New York raised the discount rate to 6 percent.
September 3, 1929: The Dow Jones peaked at 381.17. That was a 27 percent increase over the prior year.
September 26, 1929: The Bank of England also raised its rate to protect the gold standard.
October 4, 1929: The Wall Street Journal and The New York Times agreed with Snowden.
October 24, 1929: Black Thursday.
October 24, 1929: Around the world, people were trying to sell their stock
October 28, 1929: Black Monday.
October 29, 1929: Black Tuesday.
1933: President Roosevelt launched the Federal Deposit Insurance Corporation to insure bank deposits. After the crash, banks only had enough to honor 10 cents for every dollar. That's because they had used their depositors' savings, without their knowledge, to buy stocks.
Now, investors are insured up to $250,000.
November 23, 1954: The Dow Jones finally regained its September 3, 1929, high, closing at 383.
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