Can someone please give me a brief and easy explanation of Black Tuesday and why it happened?

Answer 1

That would be October 29, 1929, and the causes are many and debatable.

My own opinion is that America was extremely optimistic coming out of a victory in WW I, and our businesses had inflated egos from their participation in outmanufacturing and outfinancing European nations to aid in the effort.

We also had newly forming capital and banking markets. Corporations were new creatures (invented in England in the late 1800's) and there was little regulation.

Companies were allowed to raise capital by offering stock to the public, and there was very little effort to represent company financial position accurately. Investors were optimistic in investing in growing companies that were doing business all over the world and paid little attention to conservative strategies.

Those companies that were in reality insolvent began folding late in 1929 and stockholders were losing entire portfolios from bankrupt companies.

Banks were also facing more and more demands from depositers for withdrawal of funds, and they were caught with their pants down because they didn't have the reserves to cover the demands. That's what happens when people bring in, say a million dollars, you pay it all out in investments, and then they come back all at once asking for their deposites back. You simply don't have it in your vault and you have to turn them away.

The combination of the run on banks and the bankruptcies of corporations created a market panic with repercussions throughout the economy. The real killer was the bankruptcy of companies and the ensuing unemployment of workers.

Answer 2

It depends on which Black Tuesday you're referencing, but I'm going to assume you mean the stock market crash in 1929 black tuesday. A simple overview would be that on that day a record 16.4 million shares were traded, cuasing the ticker tape (which tracks stocks traded and prices) to fall behind over 2 hours. The stock market the proceeded to fall essentially every day for a month, and more thereafter. The Dow Jones Industrial Average (DJIA) did not reach it's pre 1929 levels until the mid 1950's. As far as why it happened there are a multitude of reasons, but again keeping it simple, there was a huge boon in the economy since the end of WW1, and the market had been sporatic up to that point with the bull market regularly seeing spouts of panic selling. Black Tuesday was essentially a burst of panic selling that didn't stop, and lead to many reforms in stock trading laws, including the Glass-Steagall Act in 1933.

Most of my information came from http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929#Official_investigation_of_the_Crash and http://mutualfunds.about.com/cs/1929marketcrash/a/black_tuesday.htm

Answer 3

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.

Blacks get all the days of the week. None left for us White guys.

Answer 4

Stocks started getting sold, faster than they were being bought. So because there was an over surplus of stocks, the price dropped (law of supply and demand.) This caused even more people to sell their stocks as well, driving the proce down even further. There is more involved, but this is basically it.

Answer 5

Black Tuesday can also refer to November 29, 1939, the date of the climax of a period of extreme smoke cover in downtown St. Louis, Missouri. The pollution was due primarily to the widespread use of bituminous coal, and resulted in near zero visibility and the use of streetlights at midday.



MORE HERE:
http://en.wikipedia.org/wiki/Black_Tuesday