2007-11-01 16:07:54 · 5 answers · asked by hamid a 1 in Business & Finance ➔ Investing
Margin Margin Margin. People were allowed to borrow up to 9 times their original investment which was a disaster waiting to happen.
2007-11-01 16:43:49 · answer #1 · answered by Anonymous · 0⤊ 0⤋
I seem to remember something about high speculation of stocks leading up to the crash. So everything was overpriced. There were also a lot of people who were in the stock market that were newbies - they didn't know what they were doing - which is why they bought those already high priced stocks.
There was also a lot of buying on margin. They bought stocks with money they didn't have. This is why you don't take out a loan to buy stocks - if the price goes down how do you pay back the loan?
2007-11-01 23:38:01 · answer #2 · answered by voluntarheel 5 · 0⤊ 0⤋
It was a lack of communication mostly. They were going through a normal correction cycle and they panicked. There wasn't the high speed Internet nor TV broadcasters to tell them not to worry, they had a run on the banks which weren't federally insured and so everything collapsed. That can't happen again because they have addressed and corrected all of those problems.
2007-11-02 00:11:52 · answer #3 · answered by Anonymous · 0⤊ 1⤋
There are many books about this in your public library some have been there collecting dust for several decades.
Take one or two to your nice house and read them.
IT'S FREE.
Don't forget to donate a book you don't need anymore.
2007-11-01 23:29:24 · answer #4 · answered by Anonymous · 0⤊ 3⤋
More sellers than buyers
2007-11-01 23:12:45 · answer #5 · answered by Common Sense 7 · 0⤊ 3⤋