The Great Depression of 1929
The US stock market's history is full of examples of catastrophic crashes that have led to the loss of large sums of money by many investors. Many of these market crashes has occurred in 1929. The Black Tuesday of 1929 is an example of one of these market crashes.
It was in October 29th, 1929 that one of the worst days in US stock market occurred. It is known as the Black Tuesday, which combined the negative effects of both the Black Thursday and the Black Monday. One and a half hours of falling behind of 12.9 million traded shares and the ticker tape was experienced on Thursday, whereas on the Black Tuesday a fall behind of two and a half hours of the ticker tape was experienced during which new 16.4 millions of shares were traded. During the Black Tuesday a 12% loss was experienced by the market as compared to the 13% one-day loss of the stock market on Monday.
Pressured by the quickly declining market, the top US bankers held a meeting during the day. Due to the urgency of the situation the bankers met twice - once at noon and once in the evening. These meetings were surrounded by the skepticism of most investors that suspected the bankers of trading stocks instead of doing their real job of stabilizing the market. The press speaker, Thomas Lamont, managed to dispel the rumors to a certain extent, but did not manage to achieve the same persuasiveness and reliability exhibited the previous day.
Most of the financial newspaper directed their daily issues to the topic of the mass selling of stocks. They tried to provide a logical explanation of the occurred financial chaos, but most of them managed only to give assumptions based on the observed events. Neither of them was able to give the actual reasons for this mass selling and the resulting disorder.
In November, the so called Great Stock Market Crash occurred, which resulted in nearly $100 billion in assets losses for the investors. The remarkable decline of 40% was experienced by the market in just two months - September and October. Generally, the beginning of the Great Depression and the end of the Roaring 20's was marked by the Black Tuesday. The market reached its bottom in July 1932, when the Dow decreased with 89.2% ending up at 41.22. It took as long as 22 years for the market to recover to its previous state, but the effects of the Black Tuesday were still felt.
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