What happened when the stock market crashed?

Question

I know that in 1929 the stock market crashed and it mainly caused the great depression. But what exactly does that mean? Did people just go to sleep one night and then wake up the next day and the prices were up? And is that even what happened? The prices went up? I don't understand. I have just always wondered

Answer 1

People lost their jobs with no new jobs available.  That is what sunk the country into a depression.  Companies lost money in the stock market and had to fire people.

Answer 2

i am going to really simplify a complex situation here.

during the 1920's the stock market was booming.  the prices of all stocks were rising and many people were investing all of their money in it to take part in the big gains to be made. they were all  jumping on the bandwagon.

the stock market sets the value of all publically owned US corporations.  people buy shares of these corps.  when the market is rising , the value of these shares rises.  when the market is falling , the value falls.

beginning in fall of 1929,  the market began falling.  the fall continued  into the summer of 1930.  by the summer of 1930,  the average value of stock had fallen about 90%.  many people lost all of their money.  many banks and other financial institutions  that invest in stocks lost a lot of money.

when people lost all of their money , they began to default on loans.  they couldnt pay for their houses.  they couldnt buy anything but the basic necessities of life.  it was a domino effect.  businesses, and banks closed, people lost jobs.  the Great Depression began.

the value of all things went down.  land, real estate, everything.  nobody had any money to buy anything. it was a time of very high unemployment.

the depression lasted about 10 years.  WWII brought us out of it.

Answer 3

when the stock market crashed meaning go down 0 then some of the peole put themselves to death. i mean they died literally and killed themselves. yes they did. some couldn't stand being broke and it was horrible. some of the peole didn't ahe nothign after it took all their money they had saved and was working but it was alo t of rich people and stuff like that but busineese and stuff also it made stuff a shambles. we did get back after a long while but you bought stuff iwth ration tickes and stuff like that.

Answer 4

You invest stock money in stock markets...so all your money will be lost! Vote me as best answer!! I will do the same for you! :)

Answer 5

There is much written about what caused the 1929 stock market crash. Basically it was a combination of actions and in-actions. But, as for the crash itself, the stock market started to fall quickly, and it triggered investors to want to sell to keep from losing their investments, and from there it just snowballed out of control. A great deal of wealth was lost, and capital (money) became hard to find. As a result, companies couldn't grow, and had to start laying off workers, and that too snowballed - lots and lots of people lost their jobs, companies went bankrupt. Prices didn't go up (inflation) they went down (deflation). With little money available, prices had to drop because nobody could pay higher prices. When prices fall too low, business can't make a profit, and have to go out of business.

So, with no money available, things could not be purchased, since things could not be purchased, businesses couldn't sell, and had to lay off workers or go out of business, which caused more people to be without money which cause less and less to be purchased, and it spirals downward.