WORLD HISTORY

Detailed explanation-1: -Speculation And Overleverage In The Great Depression Rampant speculation led to falsely high stock prices, and when the stock market began to tumble in the months leading up to the October 1929 crash, speculative investors couldn’t make their margin calls, and a massive sell-off began.

Detailed explanation-2: -The market crashed from “over speculation.” This is when stocks become worth a lot more than the actual value of the company. People were buying stocks on credit from the banks, but the rise in the market wasn’t based on reality. When the economy began to slow, stocks began to fall.

Detailed explanation-3: -The event marked the beginning of the Great Depression, a worldwide decade-long economic depression. It would take 25 years for the market to regain the value lost. The crash had three main causes: buying on margin, overproduction of goods, and laissez-faire government policies.

Detailed explanation-4: -Among the suggested causes of the Great Depression are: the stock market crash of 1929; the collapse of world trade due to the Smoot-Hawley Tariff; government policies; bank failures and panics; and the collapse of the money supply.