Why did the Wall Street Crash of 1929 occur?

Question

What is boom and bust theory and what made share prices drop?

Answer 1

Everybody bought stocks on credit.

Answer 2

boom - property boom, florida property bull market 1920s
credit loosening, esp British investors inflow into Wall street-followed by Federal reserve tightening of credit but influential econ professor giving speeches about how great the economy/stock market was this mesmerised investors
non professional investors getting in on the act, ie jp morgan (founder of the investment bank was alarmed that his shoeshine boy would give tips on which shares to own since every share could only go up in value)
share prices dropped due to the sudden about turn by the fed regarding interest rates, ie they rised rates and this was unexpected and the worst thing that could have happened for the investors who had put their life savings and mortgaged their homes etc and borrowed on margin to buy shares. People fell into instant debt overnight and hence the stock market fell, adding to this the stockmarket ticker, ie stock index was a few hours delayed in relaying stock prices and so people only found out how much they'd lost hours after the event had occured, when the market reopened the stock price falls were increased by the rush to sell because there was unreliable info.

Answer 3

Prices grew exponentially, reflecting the increased risk of a bubble bursting, resulting ultimately in a market failure. The prices dropped because the path necessary for them to grow was unsustainable. Forced herd behavior was then triggered by a combination of calling margin loans and Federal Reserve tightening of the money supply, making recovery of prices impossible. Market prices match the amount of money available. If you look deeper at the problem however, away from the specific event, the macroeconomic variables were being driven by the attempt to force the world economy back onto the gold standard. In the end, it was the Gold Standard which forced the Great Depression to occur. The stock market was really just a triggering event that was itself triggered by events stemming from World War I.

Answer 4

Black Tuesday is notorious for being the worst day in the U.S. stock market, but in terms of percentage loss, the honor goes to Black Monday (1987 and 1929). To understand what makes it the worst day, read on.

Black Tuesday - October 29th, 1929

Combine the worst features of Black Thursday with the worst features of Black Monday and you get Black Tuesday. On Thursday, a record 12.9 million shares traded and the ticker tape fell behind one and a half hours. On Black Tuesday, a new record of 16.4 million shares were traded and the ticker tape fell behind by two and a half hours! On Monday, the stock market suffered a record one-day loss of around 13 percent. On Black Tuesday, the market suffered a loss of about 12 percent.

Like the previous "Black Days," the top bankers held a meeting during the day about the market.

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Only this time they met twice – once at noon and again in the evening. Once again, Thomas Lamont spoke with the press, but this time it was mostly business. Rumors were that the bankers were selling stocks rather then stabilizing the market. He dispelled the rumors, but did not offer the positive remarks that the previous tragic days featured.
Here is what the Seattle Times wrote about Black Tuesday:

"A veritable bedlam of activity reigned in leading stock brokerage houses in Seattle today as the greatest avalanche of security selling known to history was launched on New York exchanges. Executives and clerks, worn by almost constant application to duty for days past, and with little respite gained by the Saturday afternoon and Sunday intermission breasted the great tide of buying and selling orders with philosophical resignation… Curiosity seemed to prompt attendance of the greater part of the milling throngs in the board rooms." (The Seattle Times, October 29, 1929)

By the end of November, investors had lost $100 billion in assets in what was later called "The Great Stock Market Crash." In just two months, September and October, the stock market had lost 40 percent of its value. Black Tuesday usually marks the point where the Roaring 20’s ended and the Great Depression started. The stock market would continue to fall until bottoming out in July of 1932 with the Dow at 41.22, down 89.2% (from 381.17 to 41.22. The stock market wouldn’t recover for another 22 years!

Answer 5

the wall street crash of 1929occur. ANS: Well if it was the 1929 crash it couldn't be any other time:!

Answer 6

everybody was investing heavily in new york stock exchange hoping that it would continue to rise but it collapsed.
Boom bust theory was millions of americans buying vast amounts of stock, borrowing money to buy the stock

Answer 7

i know in 1929!
it crash cus of the intrest rate goin up like they are now
give m ebest ans
safe
hoold it

Answer 8

The end (bust) of irrational exuberance (boom).

Answer 9

market manipulation by some real players

Answer 10

because someone ran a stop sign.