The Stock Market Crash 15.1. Background 1920s appeared to be a decade of prosperity = “The Roaring 20s” 1920s appeared to be a decade of prosperity =

Slides:

Advertisements

Similar presentations

Election of 1928 Hebert Hoover wins in a landslide.

Advertisements

LEARNING TARGETS Students will be able to explain the impact the decade of the 1920s had on the Great Depression. Students will be able to analyze.

Chapter 24 The Great Depression.

Warm-Up People who own stock in companies may receive cash payments based on how much profit the companies make. Name 2 companies you would invest in.

Bellringer. Causes of the Great Depression Farmers’ crisis/ Over production (surplus of goods, falling prices) Credit purchasing Tariffs (stopped foreign.

The Stock Market Crash Mr. Dodson.

The Stock Market Crash of 1929 and the beginning of the Great Depression.

Ch. 11 The Great Depression

The Great Depression How was a decade of prosperity followed by a decade of hopelessness?

BELLWORK What is a Depression? What are some signs of a booming economy? (How do you know when an economy is doing well?) How would you cut back on your.

Chapter 24 THE GREAT DEPRESSION

1920s Economy  Everyone has disposable income: Suburbs, House, cars, radio, Entertainment, etc  The stock market was a way to make money with extra.

DESCRIBE SOCIAL AND ECONOMIC CONDITIONS FROM THE 1920S THROUGH THE GREAT DEPRESSION REGARDING FACTORS LEADING TO A DEEPENING CRISIS, INCLUDING THE COLLAPSE.

Stock Market Crash & the Great Depression Mr. Koch US History B Forest Lake High School.

Origins of the Great Depression

Chapter 15 The Great Depression

Boom and Bust Canada in the 1920s In the 1920s … Canada’s economy recovered quickly after WWI Canada’s economy recovered quickly after WWI By the mid.

The Great Depression The Crash & It’s Causes. The CRASH Thursday, October 24, 1929 sell, Sell, SELL! Five leading NY bankers meet at noon, secretly pump.

Objective 1)List and describe at lease three effects of the depression in a writing activity.

“Black Tuesday” The “Roaring 20s” Come to a Crashing End.

The Causes of the Great Depression

Causes of the Great Depression

Causes of the Great Depression

The Stock Market Crash Background 1920s appeared to be a decade of prosperity = “The Roaring 20s” 1920s appeared to be a decade of prosperity =

LONG TERM CAUSES OF THE GREAT DEPRESSION

CHAPTER 15 SECTION 1 PAGES  Some voices warned of problems within US economy  Nations agricultural crisis  “Sick” industries  Reliance on.

Chapter 25 Section 1 The Cold War Begins Section 1 Causes of the Depression 21.1 Objectives Discuss the weaknesses in the economy of the 1920s. Explain.

Optimistic mood where everything seemed fine People put savings into stock market hoping to get rich.

Causes of the Great Depression. Stock Market Soars Bull Market- long period of rising stock prices In the late 1920’s, a bull market had many people investing.

 The 1928 election placed former head of the Food Administration and secretary of commerce, Herbert Hoover, on the Republican ticket against Democratic.

The Great Depression. General Causes of the Great Depression  Global Depression  European World War I debts went unpaid  Consumer debt  Credit  Lack.

The Stock Market Crash Chapter The Nation’s Sick Economy The prosperity of the 1920s was superficial: Major industries are not making a profit;

The Great Depression.

Dow Jones Industrial Average What is the DJIA –Invented by Charles H. Dow –It is an average of stock prices of major industries –Started with 12 stocks.

BELLWORK 1. List three factors that contributed to economic growth in the 1920’s. 2. How were the post-WWI economies of Canada and Latin America similar?

False Sense of Prosperity Mood of America optimistic about future Medical advances = life expectancy up 10 years Infant mortality down Standard of living.

Chapter 21 Sec 1 Bellringer

Causes of the Great Depression Mr. Blais America in the World (TVP)

Chapter 9 The Great Depression

Boom and Bust USA in the 1920s In the 1920s …The Roaring Twenties America’s economy recovered quickly after WWI The government was Republican and favored.

Troubles of the 30s.  People who bought stocks on margin (on credit with 10% down) were now being asked to pay brokers the money they still owed.  On.

1928 President Hoover said that the nation was: “nearer to the final triumph over poverty than ever before in the history of any land.” What evidence.

Election of 1928 Incumbent – Calvin Coolidge o “I do not choose to run for President in 1928” – August 1927 Republican – Herbert Hoover o “We in America.

Find a partner and pick up one of the handouts from the front of the room. You only need one handout per pair. Today is going to be AWESOME!!! I.

10/13 Bellringer 5+ sentences It is often thought to be true that it is nearly impossible to “legislate morality”. Many historians would use the 18 th.

The Stock Market Crash of What happened in the election of 1928? When Americans elected Herbert Hoover President in 1928, the mood of the general.

Opening Assignment Would you borrow money to invest in the stock market if it was easily available? What stock would you buy? How might this be very profitable.

The Wall Street Crash 29th October 1929 The Roaring 20s: The Good 1. Government policy of laissez faire. 2. US industry had been boosted by WWI. 3. Mass.

 What events led to the stock market’s Great Crash in 1929?  Why did the Great Crash produce a ripple effect throughout the nation’s economy?  What.

The Economy The Economy Introduction  The economy of a country refers to things like prices, jobs, wages and employment.  The economy of.

Causes of the Great Depression. The rich get richer and the poor get poorer in the 20s F /5 of the nation’s wealth was owned by 2% of the pop.=

The Great Depression. What was the Great Depression? Time of economic crisis characterized by high unemployment during the 1930s, the beginning is marked.

The Wall Street Crash By: Savannah Hardiman Miranda Innis Jake Kinsel Kayla Pinson.

HW: Quiz on 1920s era (notes and 20.1 Vocab) and the Stock Market Crash.

Causes of the Great Depression. Possible Causes of the Great Depression Stock Market Crash Over production Unequal distribution of wealth Consumerist.

1 Crash and Depression (1929–1933). 2 The Stock Market Crash What events led to the stock market’s Great Crash in 1929? What events led to the stock market’s.

Chapter 24 The Great Depression Section 1 Prosperity Shattered.

 The day that many view the Great Depression starting was Black Tuesday.  Black Tuesday: October 29,  This was the day that the stock market.

FROM CRASH TO DEPRESSION  1927  1928  The markets increased steadily….  Stock prices continued to climb, year after year!  Seeing the Stock.

The Great Depression. ● Decrease in demand for American goods after WWI ● Installment Buying/Buying on Margin ● Decrease in Purchasing Power.

The “Roaring 20s”…. The “Roaring 20s”… Come to a Crashing End “Black Tuesday”

Unit 6 Day 10 (Black Tuesday) Quote: “There is no cause to worry. The high tide of prosperity will continue.” - Andrew W. Mellon, Secretary of the Treasury.

Warm-ups During the 1920’s, many investors borrowed money from banks in order to speculate in the stock market. This practice was often a bad idea for.

Post War Economic Boom ► Americans were earning more money than ever in the 1920s. ► Americans made $61 billion in 1922, they made $87 billion by 1929.

Bull Market Bear Market Stock Speculation- Why Problem? Margin Buying- Why Problem? Security Broker Investor Equity.

The Stock Market Crash of 1929

The Stock Market Crash 15.1.

1920’s CRASH AND DEPRESSION.

In your notes create a list of how life was good in the Roaring 20’s.

Presentation transcript:

The Stock Market Crash 15.1

Background 1920s appeared to be a decade of prosperity = “The Roaring 20s” 1920s appeared to be a decade of prosperity = “The Roaring 20s” Some believed economic problems existed below the surface Some believed economic problems existed below the surface Most ignored these warnings Most ignored these warnings

Credit Confidence in nation’s prosperity led many to purchase goods on credit Confidence in nation’s prosperity led many to purchase goods on credit 1929: Credit purchases =$7 billion 1929: Credit purchases =$7 billion Government encouraged credit spending by keeping interest rates low Government encouraged credit spending by keeping interest rates low

Problems With Easy Credit Easy access to credit enabled people to buy things they couldn’t afford Easy access to credit enabled people to buy things they couldn’t afford Economic experts worried about debt Economic experts worried about debt High consumer debt could cripple people in an economic downturn High consumer debt could cripple people in an economic downturn

Bull Market A market with an upward trend in prices A market with an upward trend in prices Seemed no end to 1920s Bull Market Seemed no end to 1920s Bull Market Bear Market A market with a downward trend in prices A market with a downward trend in prices

Stock Speculation = Playing the market by buying and selling stocks to make a quick profit – becomes popular = Playing the market by buying and selling stocks to make a quick profit – becomes popular This stimulated economic growth This stimulated economic growth Rapid buying and selling inflated stock prices Rapid buying and selling inflated stock prices Could be a problem if demand decreased. Could be a problem if demand decreased.

Margin Buying = The practice of purchasing stocks with borrowed money = The practice of purchasing stocks with borrowed money Speculators often buying stock with 10% down – borrowing 90% Speculators often buying stock with 10% down – borrowing 90% Margin buying was great with a bull market But…. Margin buying was great with a bull market But…. Bear market would be investors deep in debt. Bear market would be investors deep in debt.

The Crash October 24, 1929: Black Thursday = The beginning of the crash October 24, 1929: Black Thursday = The beginning of the crash Rising interest rates made large numbers of investors nervous Rising interest rates made large numbers of investors nervous - they began selling large # of shares - they began selling large # of shares Leads confidence to drop and prices pushed lower and lower Leads confidence to drop and prices pushed lower and lower

Black Tuesday October 29, 1929 October 29, 1929 Stock prices sank to shocking lows Stock prices sank to shocking lows 16 million shares of stock were sold in one day 16 million shares of stock were sold in one day = huge amount of debt = huge amount of debt

Stock Brokers & Debt Brokers began to contact investors who had purchased theirs on margin(by borrowing) Brokers began to contact investors who had purchased theirs on margin(by borrowing) They demanded cash to cover their loans They demanded cash to cover their loans Investors were unable to pay Investors were unable to pay = had to sell stocks at huge losses = had to sell stocks at huge losses By mid- Nov – leading stocks values were cut in half!! By mid- Nov – leading stocks values were cut in half!!