Millionares Jumping out of Buildings Stock Market Crash ??

Question

Why were Rich Multi-Millionares jumping out of buildings in 1929 when the Stock Market Crashed ??

I mean HOW could they had Possibly Lost everything on the Stock Market in 3 Days ( Black Thursday, Black Monday Oct 28, & Black Tuesday Oct 29th 1929 ) ??

MY THEORY:

''I think that they lost so much money when the Stock Market Crashed in 1929, that they fell into such Great Debts that they knew they'll never be able to pay it all off, that they decided to kill themselves''.

At least that's my theory, does anybody else have a Better Answer than that ???

Answer 1

They weren't millionaires when they were jumping.

In 1929, 10% margin was common.  Imagine you had invested 100,000 on margin, then you controlled 1,000,000 in stock.  

This means that if the market lost 15%, you lost 150,000.  So, the broker would take all of your 100,000 and you would still owe 50,000.

What if the 100,000 wasn't yours in the first place?  A lot of big shots were "borrowing without permission" (stealing) money that customers had deposited with them.  The big shots thought this was easy money to use somebody else's money for the margin, make a bundle, and put back the 100,000.  Then the market crashed and the 100,000 was gone and no way to pay it back.  You can't be sent to prison for debt, but you can go to jail for a long time for embezelment.

Answer 2

because they dont wana lose money if you had 1 million dollars wouldnt you still not wont to lose any money?

Answer 3

They were buying on margin (borrowed money).  Its sorta like buying a million dollars worth of stock on a credit card.  If the stock becomes worthless you still have to pay the credit card company.  Kinda makes you want to jump, right?  Hopefully not, but it might cross my mind.

Answer 4

that is a MYTH about them jumping.  Never happened.

Answer 5

I wouldn't lose too much sleep if today's Wall Street manipulators and crooks start jumping.

Answer 6

Herbert Hoover and Congressman Carter Glassmany, many others had tried to urge Calvin Coolidge to cool the market speculating. As the SEC basic history brings up, there was excessive use of margin (as in borrowing money to buy stocks) and poor information about companies. When congress reviewed the events of and following the crash, the securities and exchange act (and agency) were produced. So now there is a federal program to control the amount of credit that can go into stock trading, along with various practices rules, and a clearinghouse of standard company information.

Answer 7

During the 1920's stocks were bought on very low margins - sort of like the futures market today. They had a lot of money but it had a very thin base. When you are used to living the high life then all of a sudden you are looking at a bread line...you say to yourself...life isn't worth it anymore. That is my take on why. it's psychological pressure...no future.