Black crash market stock tuesday
Stock markets across the world have witnessed many crashes and some of these crashes are so devastating that they are remembered for ever. One such stock market crash occurred on October 29 in the year 1929 in United States. Since this crash occurred on Tuesday, it is also remembered as Black Tuesday crash. It is also remembered as the worst day in the history of stock markets in United States. On that day, about 16.4 millions shares were being traded at the stock exchange and ticker tape fell by more than two and half hours.
This gives us an idea how devastating it was. The market loss suffered due to Black Tuesday stock market crash was about 12%. The after effects of this stock market crash were also great and as a result, people that had invested in money in different types of stock lost more than $100 billion by end of November. It is very important to note here that if seen in percentage terms, this crash is not the most severe but since it is the point where the roaring bull run of 1920s ended exactly and era of great depression started, it is called as the Black Tuesday stock market crash.
Characteristics of black tuesday stock market crash:
There are many characteristics of Black Tuesday stock market crash for which it would be remembered for a long time. The Wall Street, official name of stock market in United States, witnessed an overall decline of about 13% in Dow Jones, the U.S stock market index. If a person counts from early September up to the Black Tuesday, he would come to know that the stock markets in United States have actually lost 40% of money invested. If it is said that Black Tuesday was just a start of Wall Street crash, it would not be incorrect. This is because the stock market fall did not stop with end of trading on Black Tuesday and rather it continued to fall for many years after. Even it was feared that the stock markets in United States may go to zero once again. In just three years approximately, the stock market in United States lost about 89%, when it was trading at levels of 40.60 on 29th July in the year 1932.
Causes of black tuesday stock market crash:
There are many reasons that were given behind the stock market crash on Tuesday that turned into Black Tuesday. Many economists and experts differed in their views and thus, everything was controversial. Many economists think that is was bound to happen as many investors have been putting their money continuously into the stock market for past many years and the time was bound to come when these investors would take away their money back along with profits. Though it did happen and even many of these investors did not come back again thereafter, this is a general reason that can be given for any stock market crash.
Many experts feel that when the stock market was rising continuously in 1920s, there was existing an era of speculative excess as well as irrational exuberance. All the people were having the desire to become rich as quickly as they can. Even it was happening too. People were enjoying and many clubs were opened in major cities in United States to meet out the demand of this richness. It also gave rise to additional investment in the stock market, as everyone knew he can double his money or even more in a very short span of time. Stock prices were at their all time highs. But there was large chunk of society that knew that such higher prices at the stock market were unsustainable. It is very important to note here that it was for the first time in the history of stock markets in United States that investors were allowed by the stock exchanges to buy stocks by way of margin borrowing.
This investment was supplemented with rising industrial production and it also increased the speculation. But there was something that was not keeping pace with the rise in the stock market. It was the GDP or the Gross Domestic Product. When the actual fact was realized, it turned into most of people selling the stocks they have and there was overall selling at the stock market, with no buyers at all. The loss of looked quite evident to all the investors and on Black Tuesday, more than 16.5 million shares were sold in a single day. All the fortune that was made for the past many years was bound to ruin and it ultimately happened. The devastating crash turned rich into poor within no time and even there were many housewives, that had invested their money to become rich soon, were converted into poor housewives. Every man, woman and child was affected by this stock market crash. Thus, the growth of capitalism and industrial expansion was stopped at a sudden. Unemployment was rising like anything at that time and the great depression started.
The black monday:
The discussion on Black Tuesday is not completed without discussion Black Monday, the day prior to ill-fated Tuesday. After the fall of market first on Black Thursday, every body had hopes of market recovering in next few sessions. But all such hopes were broken down on Monday, on 28th October 1929, when the stock market was greatly hit, just one day prior to Black Tuesday. The volumes at the stock market were one of highest and there were about 9.25 million shares traded. The speculators were confirmed at that time that the stock market was bound to collapse. They were only praying for fewer damages, which did not happen. Most of economists feel that the Black Monday was a signal to great losses that occurred on Black Tuesday and the great depression that started thereafter. The losses occurred to investors and traders on Black Monday and Black Tuesday were not recovered in the coming years and even many of them stopped trading at the stock market for once and all.
started thereafter. The losses occurred to investors and traders on Black Monday and Black Tuesday were not recovered in the coming years and even many of them stopped trading at the stock market for once and all.0ther articles
