Black Tuesday During The 1920's

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grade this essay out of 100: During the 1920’s, the United States saw a period of rapid economic expansion. However, this economy, which had an appearance of prosperity, had many flaws. The economy until this point had been growing in the process of speculation, where people invested in stocks that had a high risk, but also a potential high gain. This meant that many companies were overvalued and this, coupled with increasing levels of debt, unemployment, low wages, and large bank loans meant that the economy was in a bubble and on the verge of collapse. All these factors accumulated into Black Tuesday, October 29th, 1929. On this day, panic speculation in the stock market along with media coverage combined to become a disaster, with investors trading around 16 …show more content…

The media actively contributed to highs and lows in the market by drawing attention to price changes, which in turn caused further price changes. The media also didn’t do a good job of explaining unbiased and non-pessimistic views towards corporations and their fundamentals, which help investors understand the stability and health of these corporations. This poor media coverage caused widespread panic among investors, and when the market opened up again on October 28th, Black Monday, there was even more selling than before. The next day, Black Tuesday, saw the greatest drop, as the Dow Jones fell by 30 points. More than 16 million shares were traded by investors on Black Tuesday, and the stock market lost more than $30 billion across the two days. The stock market crash of 1929 had a profound effect on not only America, but the entire world in the years following. Many countries across the world were dependent on the American economy, and following the events of Black Tuesday, other countries around the world also started experiencing economic

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