Presentation on theme: "THE GREAT DEPRESSION BEGINS ( )"— Presentation transcript:
1THE GREAT DEPRESSION BEGINS (1929 - 1932) CHAPTER 18THE GREAT DEPRESSION BEGINS( )
2THE GREAT DEPRESSIONA time period of incredible economic hardship that devastated the United States during the 1930s
318.1 – THE CAUSES OF THE GREAT DEPRESSION see your graphic organizer for this section
4WHAT IS THE STOCK MARKET? The arena in which publicly owned companies are issued and traded through the buying and selling of stocks (a share of the company)
5WHAT IS A BULL MARKET?A market in which prices are rising, generally over a longer period of time
6WHAT IS A BEAR MARKET?A market in which prices are falling, generally over a longer period of time
7WHAT IS BUYING ON MARGIN? Making a down payment for a stock, not paying full price up front (ex. For 10% down, you could “buy” $10,000 worth of stock with only $1,000). The other $9,000 is loaned to you buy the stockbroker.
8When the stockbroker demands the loan be paid back……..uh-oh WHAT IS A MARGIN CALL?When the stockbroker demands the loan be paid back……..uh-oh
9Risk of buying on margin You want to buy $100 worth of stock but only have $20You buy on margin, put up the $20 and borrow the other $80 from a brokerThe stock soars to $200. You sell, repay the $80 loan and now have $120 in your pocket. You spent $20 to start, so you made $100(not bad!)The stock plummets to $20. You sell but have $0 left because you paid $20 to buy and sold for $20, leaving you nothing. BUT, you still have to repay the loan of $80, where do you get the money to repay?????
10WHAT IS SPECULATION?Taking risks/making bets that the market will continue to rise and buying/selling stocks accordingly. Basically, betting on the future.
11HOLD OR SELL?You and your spouse have decided to spend part of your savings on stock. Stocks are all the rage and you see everybody else making so much more money on stocks than on lower interest rates in your savings account, so why not buy stock? You don’t have quite enough cash to buy as much as you want, so you decide to take out a loan. You already bought a car and a fridge with credit (basically a loan), and nothing bad happened, so what’s the real risk? After much discussion you decided to purchase $10,000 worth of Ford Motor Company, but you only put $1,000 down. Fred, your stockbroker, is loaning you the other $9,000. Now you have to decide, as you monitor the stock, to hold it or sell it. Good luck!
13Your stock is at $10,200 Hold or sell? What is your profit/loss? DAY 6Your stock is at $10,200 Hold or sell? What is your profit/loss?
14Your stock is at $10,300 Hold or sell? What is your profit/loss? DAY 11Your stock is at $10,300 Hold or sell? What is your profit/loss?
15Your stock is at $11,000 Hold or sell? What is your profit/loss? DAY 16Your stock is at $11,000 Hold or sell? What is your profit/loss?
16Your stock is at $10,800 Hold or sell? What is your profit/loss? DAY 21Your stock is at $10,800 Hold or sell? What is your profit/loss?
17Your stock is at $10,550 Hold or sell? What is your profit/loss? DAY 26Your stock is at $10,550 Hold or sell? What is your profit/loss?
18Your stock is at $10,450 Hold or sell? What is your profit/loss? DAY 31Your stock is at $10,450 Hold or sell? What is your profit/loss?
19Your stock is at $10,600 Hold or sell? What is your profit/loss? DAY 36Your stock is at $10,600 Hold or sell? What is your profit/loss?
20Your stock is at $6,000 Hold or sell? What is your profit/loss? DAY 45Your stock is at $6,000 Hold or sell? What is your profit/loss?
21Your stock is at $1,000 Hold or sell? What is your profit/loss? DAY 51Your stock is at $1,000 Hold or sell? What is your profit/loss?
22WHAT IS A BANK RUN?When depositors are worried their bank is running out of money so they RUN to the back to withdraw their money. When everybody does this at once the bank can’t handle it and people can lose a lOT of money.
23THE CRASH OF 1929The value of stocks plummeted and people lost a ton of money. Black Thursday (October 24) - SM plummeted, a panic ensued. Black Tuesday (October 29) – the SM lost between $10-$15 billion in value.
2418.2 – LIFE DURING THE DEPRESSION GD led to massive loss of jobs and propertyWorsened during Hoover’s administration(ex – 30,000 companies go out of business)People turn to bread lines, soup kitchens, YMCAs…People lost homes and shantytowns popped up (why did they call them Hoovervilles?)People wandered from place to place looking for work, food, shelter….(hobos)
2518.2 – THE DUST BOWL (read pp. 638-639) Dust Bowl refers to the “fruitless” land/fieldsWind storms could be deadly, leading to blackening skies, suffocation, destruction of existing crops…Led to “interesting” actions such as rabbit drivesMany who lost their farms headed to California for workOkiesDB was a result of several things:HomesteadingDrop in crop pricesDraught hitting the Great Plains
3018.2 – ENTERTAINMENTPeople turned to entertainment as an escape from the worries/stresses of the GDMovies, radio plays, comic books, superhero (Superman and Batman in the late ’30s)
31HOLLYWOOD Millions attended movies Comedies provided escape Stars such as Jimmy Stewart, Shirley Temple and Groucho MarxKing Kong (1933)Wizard of Oz (1939)Gone with the Wind (1939)Walt Disney emerges in late ‘20sMickey Mouse (1928)Snow White (1937) – first feature length animated film
32RADIO Radio provided daily entertainment sort of like TV today?Creates common culture, shared experiences…Comedians such as Jack Benny and George BurnsSuperheroes included the Lone Ranger and the Green HornetEmergence of soap operas (Guiding Light)why were they called soap operas?George Burns
33LITERATURE & ART Artists/authors portrayed the life surrounding them John SteinbeckGrapes of Wrath focuses on Okies and Dust BowlWilliam FaulknerThe Sound and the Fury (used stream of consciousness…what is that?)Images were becoming more influential, photographers captured daily life and strugglesLife – introduced in 1936 by Henry LucePainters such as Grant Wood depicted traditional American valuesAmerican Gothic
3418.3 – HOOVER RESPONDS TO THE DEPRESSION HH was optimistic things would get better soon after the CrashBelieved gov’t had a role but did not favor “direct” aid to individualsFaith in “rugged individualism”Fear of socialist policies in Europe after WWIFeared deficit spending (what is this?)Herbert Hoover
3518.3 – HOOVER RESPONDS TO THE DEPRESSION Held conferences w/ leaders of business, banks, RRs, labor…Increased funding for public works projectsDid not create enough jobsSee graphic organizer for specific policiesAlthough Hoover failed to pull the country out of the depression he was actually a very “active” president; did a lot to expand the role of the Federal gov’t, especially for that time but critics say he did not do enough