Comparing the 1929 Market Crash and the Current Position...

Comparing the 1929 Market Crash and the Current Position in the Stock Market During the 1920s, the North American economy was roaring, but this decade would eventually be put to a stop. In October of 1929, the stock market began its steepest decline to this date in history. Many stock market traders and economists believe and pray that it was a one-shot episode never to be repeated. On the other hand, many financial analysts and other economists believe that the current stock markets are in place to repeat the calamitous errors of the 1920s. In this paper, I will analyze the causes of the crash and discuss the possibilities of it re-occurring. In 1914, World War I began. The United States intended on keeping out of the war, but by†¦show more content†¦Along came installment credit and people were rushing out to buy cars, radios, clothes, intending to pay for them later. A boom in residential housing began, as well as a general increase in manufacturing capacity. With residential growth expanding, construction items such as lumber, bricks, glass and nails underwent an 80 percent increase in consumption. The 1920s saw a great technological advance. Mechanical power almost completely replaced manpower in the work force and output per man-hour almost doubled between 1910-1929. At this point in the 1920s, Americans believed that this soaring increase in the economy would go on forever. The United States had now become a world super power. People started investing in the stock market believing that Using the Dow Jones Industrial Average (DJIA) at the beginning of every year as a measure, the economy has grown in a log-linear fashion since 1897. There have been two major oscillations in the DJIA. The first major oscillation began in the early 1920s. In the period from 1924 to 1929 the DJIA rose from 100 to 300, just prior to the crash of October 1929. During the 1930s and the Great Depression, the DJIA reached a low of 42. The second major oscillation was less dramatic. There was an increase from the expected baseline of growth that began in 1958, which lasted throughout the 1960s but was followed by a dip below the baseline during the 1970s. Finally, in theShow MoreRelatedThe Great Depression in Cinderella Man Essay1592 Words   |  7 PagesThe Great Depression is seen as one of the most sorrowful and desolate times in the history of the United States. This time was the longest period of recession ever seen by this nation so far. It lasted from 1929 to 1939, over ten years of complete confusion and despondency within the people. Many Americans were affected greatly by this tragic time and sacrificed much of their lives so that they and their families may have the chance to live. This act of desperation can be seen throughout the movieRead MoreSimilarities and Differences of the Great Depression as Compared to Todays Financial Crisis3753 Words   |  16 Pagesthe time period 1929 till 1933 (Great Depression). 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