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Financial Collapse - Coggle Diagram
Financial Collapse
The Stock Market Crashes
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many investors who had traded on margin were forced to sell off their stocks to pay back their loans
when millions of people were trying to sell stocks at the same time with very few buyers it caused the prices to fall even more, leading to a bigger stock market crash.
In 1929, New York City’s Wall Street was the financial capital of the world.
At Wall Street’s New York Stock Exchange, optimism about the booming U.S. economy showed in soaring prices for stocks
To get in on the boom, many middle-income people began buying stocks on margin.
This meant that they paid a small percentage of a stock’s price as a down payment and borrowed the rest from a stockbroker.
In September 1929, some investors began to think that stock prices were unnaturally high.
They started selling their stocks, believing the prices would soon go down. By Thursday, October 24, the gradual lowering of stock prices had become an all-out slide downward.
Everyone wanted to sell stocks, and no one wanted to buy.
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A Flawed US economy
uneven distribution of wealth, overproduction by business and agriculture, and the fact that many Americans were buying less.
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