The stock market crash of 1929 marked the beginning of the Great Depression. Fueled by postwar economic growth and optimism, stock values increased dramatically during the 1920s as more Americans invested in the market. However, stock prices became inflated and unsustainable. The market crashed on October 24, 1929 in a major panic known as "Black Thursday" and fell further on October 29th "Black Tuesday", wiping out billions in market value. This crash devastated the American economy and led to widespread unemployment, poverty, and despair during the Depression years of the 1930s.
The document summarizes job creation programs during the Great Depression and Great Recession. During the Great Depression, FDR introduced the New Deal which included programs like the CCC, CWA, PWA, and WPA to create jobs and reduce unemployment. These programs focused on restoring forestation, public works projects, and construction. During the Great Recession, unemployment rose again and Obama introduced new job creation programs, while earlier the American Job Creation Act under Bush aimed to stimulate job growth through tax incentives for businesses. Job creation programs are used by governments during economic downturns to reduce unemployment.
Richard Woolhouse, Senior Economist at Centre for Cities, delivered this presentation at the West Midlands Regional Observatory's Annual Conference, 20th October 2009 in Sutton Coldfield, UK. Richard looks at the global recession, government debt, how the recession has impacted different cities and areas of the UK differently, and regional unemployment rates in the UK.
Following Presentation deals with brief outline over what is known as "Global Recession". It has novice friendly language and attention seeking approach.
The document discusses recessions and business cycles. It defines a recession as a significant decline in national output (GDP) that typically lasts 6-18 months. Recessions increase unemployment as firms hire fewer workers when production declines. The business cycle refers to the economy regularly fluctuating between periods of growth (booms) and contraction (recessions). While called a "cycle," the fluctuations can be unpredictable in length. A depression is a more severe economic downturn than a recession, as seen in the Great Depression in the US. The Great Recession of 2008 was the worst global recession since WWII. Potential causes of recessions discussed include high interest rates, high inflation, and reduced consumer confidence.
The document summarizes key events leading up to and during the 2008 financial crisis. It discusses how the Federal Reserve lowered interest rates in the early 2000s, fueling a housing price bubble. It also explains how subprime lending increased and how financial innovations like collateralized debt obligations and credit default swaps contributed to increased leverage and risk in the system. When the housing market began to decline in 2006-2007 and subprime borrowers started to default, it led to a full-blown crisis in 2008 with the collapse of major investment banks and a stock market crash.
The document discusses the 2008 recession and its causes and impacts. It notes that while a recession is technically defined as declining economic activity over several months, the US was likely already in a recession. It identifies several factors contributing to the recession, including households having no savings, consumers being out of available credit, lower economic activity following interest rate cuts in 2001, and increased government spending driven by the wars in Iraq. It also discusses risks like rising inflation if the dollar declines in value or demand for treasury bonds decreases.
The Great Recession of 2008 was the worst economic downturn since the Great Depression. It originated in the United States due to a housing bubble and lax lending practices that led to many subprime mortgages being issued. As the housing market declined, it caused a financial crisis that spread globally. Major financial institutions collapsed and unemployment rose sharply in the US and Europe. The recession had significant impacts including job losses, declines in GDP, real estate prices and stock markets falling worldwide.
The document summarizes job creation programs during the Great Depression and Great Recession. During the Great Depression, FDR introduced the New Deal which included programs like the CCC, CWA, PWA, and WPA to create jobs and reduce unemployment. These programs focused on restoring forestation, public works projects, and construction. During the Great Recession, unemployment rose again and Obama introduced new job creation programs, while earlier the American Job Creation Act under Bush aimed to stimulate job growth through tax incentives for businesses. Job creation programs are used by governments during economic downturns to reduce unemployment.
Richard Woolhouse, Senior Economist at Centre for Cities, delivered this presentation at the West Midlands Regional Observatory's Annual Conference, 20th October 2009 in Sutton Coldfield, UK. Richard looks at the global recession, government debt, how the recession has impacted different cities and areas of the UK differently, and regional unemployment rates in the UK.
Following Presentation deals with brief outline over what is known as "Global Recession". It has novice friendly language and attention seeking approach.
The document discusses recessions and business cycles. It defines a recession as a significant decline in national output (GDP) that typically lasts 6-18 months. Recessions increase unemployment as firms hire fewer workers when production declines. The business cycle refers to the economy regularly fluctuating between periods of growth (booms) and contraction (recessions). While called a "cycle," the fluctuations can be unpredictable in length. A depression is a more severe economic downturn than a recession, as seen in the Great Depression in the US. The Great Recession of 2008 was the worst global recession since WWII. Potential causes of recessions discussed include high interest rates, high inflation, and reduced consumer confidence.
The document summarizes key events leading up to and during the 2008 financial crisis. It discusses how the Federal Reserve lowered interest rates in the early 2000s, fueling a housing price bubble. It also explains how subprime lending increased and how financial innovations like collateralized debt obligations and credit default swaps contributed to increased leverage and risk in the system. When the housing market began to decline in 2006-2007 and subprime borrowers started to default, it led to a full-blown crisis in 2008 with the collapse of major investment banks and a stock market crash.
The document discusses the 2008 recession and its causes and impacts. It notes that while a recession is technically defined as declining economic activity over several months, the US was likely already in a recession. It identifies several factors contributing to the recession, including households having no savings, consumers being out of available credit, lower economic activity following interest rate cuts in 2001, and increased government spending driven by the wars in Iraq. It also discusses risks like rising inflation if the dollar declines in value or demand for treasury bonds decreases.
The Great Recession of 2008 was the worst economic downturn since the Great Depression. It originated in the United States due to a housing bubble and lax lending practices that led to many subprime mortgages being issued. As the housing market declined, it caused a financial crisis that spread globally. Major financial institutions collapsed and unemployment rose sharply in the US and Europe. The recession had significant impacts including job losses, declines in GDP, real estate prices and stock markets falling worldwide.
The document provides an overview of the American economy including its general history, current levels of unemployment, household debt, and consumer confidence. It notes that the US has the largest national economy and was the largest manufacturer in the 19th century. Recently, unemployment has fallen under President Obama due to gains in the private sector, household debt is growing more slowly but consumers may be adding debt again, and consumer confidence declined from higher fuel prices and inflation expectations. In conclusion, the economy is slowly recovering influenced by many interconnected factors.
The document discusses the global economic crisis of 2007-2009. It provides details on:
- How the US recession impacted other major economies like China, Europe, and Japan through decreasing exports and economic growth.
- Countries like India saw declines in sectors like IT and manufacturing that relied on US demand.
- The crisis had varying effects around the world, with some countries like Australia avoiding recession and others like Africa being less impacted due to less integrated markets.
- The downturn revealed weaknesses in many economies and their reliance on stable global demand, testing their financial systems and regulations.
The 2008 global economic crisis started in the US housing market but spread globally. It began as a financial crisis caused by factors like the housing bubble, poor lending practices, derivatives like CDOs and CDS, and excessive leverage or debt. This led to $30 trillion in destroyed financial assets worldwide. Governments implemented fiscal stimulus programs while central banks lowered interest rates to rescue economies. However, the full effects were prolonged and experts said recovery would not be until 2010 or beyond. New financial reforms have been introduced but regulators still struggle to prevent future crises given the pace of innovation and incentive for banks to circumvent rules in pursuit of profit.
Presentation at Texas Christian University\'s AddRan Festival Of Undergraduate Scholarship and Creativity, April 2009 and winner of TCU\'s Economic Department Award to Best Presentation in Economics.
The 2008 Global Financial Crisis was caused by a rise and fall in housing prices, loose monetary policy by the Fed that fueled risky lending, and the collapse of major investment banks due to their leveraged positions. It led to a recession characterized by falling home values, high unemployment, declining manufacturing and automotive industries, and financial losses for colleges. However, some developing countries were less impacted. The crisis also contributed to a shift in global power towards countries like China, India, and Brazil. Governments responded by reducing interest rates, increasing spending on infrastructure, lowering taxes and boosting transfer payments, and establishing funds to provide companies with access to capital.
2008 World Economic crisis, Global Meltdown, Global Financial CrisisJagmeet Singh Bajaj
The 2008 financial crisis was caused by a combination of factors: rising housing prices, risky lending practices, and overreliance on complex financial instruments. When the housing bubble burst, it exposed vulnerabilities throughout the financial system. Major investment banks collapsed and governments had to bail out firms like AIG, Fannie Mae and Freddie Mac. The crisis led to a global economic downturn, trillions in wealth destruction, and high unemployment in many countries. Governments addressed the crisis through stimulus spending, bank bailouts, and new financial regulations aimed at preventing future crises.
This document discusses the global financial crisis that began in 2007. It describes how the crisis was triggered by a liquidity shortfall in the US banking system that resulted in collapsed financial institutions. The crisis contributed to business failures, declines in wealth, government financial commitments, and reduced economic activity worldwide. Housing markets also suffered with increased foreclosures. The crisis is considered the worst since the Great Depression. Multiple causes have been proposed and governments have implemented regulatory and monetary policies to stimulate economies and stabilize financial markets.
The document discusses the effects of the subprime crisis and Eurozone crisis on the world economy. It provides background on subprime loans and how loose lending standards contributed to the subprime crisis. The crisis spread through losses by financial institutions and investors, decreasing confidence and impacting markets. The Eurozone crisis began with Greece's debt problems and spread to other European nations with high debt levels. Causes included slow growth, shrinking credit, increased government spending, and austerity exacerbating issues. Both crises led to impacts like rising unemployment, falling business activity, and economic impacts.
Term paper written for graduate economics course covering the causes of the 2008 global financial crisis and outlining the September 2009 G-20 meeting as it related to addressing the issue.
The document discusses the financial crisis of 2007-2009, known as the subprime mortgage crisis and real estate crisis. It was the worst financial crisis since the Great Depression. The total cost to the US economy was $600 billion and the rescue plan cost an estimated $1 trillion. Easy credit conditions, housing price declines in 2006, financial innovations, and deregulation all contributed to the crisis. Effects included impacts on the US and global economies, with global economic growth slowing down significantly. Responses included the US government purchasing troubled assets worth $700 billion and various measures by the Jordanian government to maintain stability, such as interest rate cuts and guaranteeing bank deposits. Lessons included the effects of globalization and the important role of
Global economic crisis(2008), and i̇ts effect in Lithuania and Other Baltic c...Khaalid Barre
This article discusses the 2008 global economic crisis and its effects in Lithuania. It describes how Lithuania experienced rapid economic growth before the crisis, with GDP increasing 10.3% in some years. However, the country was unprepared for the crisis. When it hit in 2008, Lithuania's GDP declined sharply by about 15%. Like other Baltic states, Lithuania faced issues like production decreases, unemployment, inflation, and lower foreign investment. The government took some steps that lacked responsibility, like austerity measures that reduced incomes and consumer demand, weakening the domestic market further. Reviving Lithuania's economy required restoring population incomes and consumer demand.
Major Market Crises of History: Reason and Effect YRS1204
There are many market crises that happened over the last 150 years, three of the major ones are discussed in the presentation which are:
1929 Wall Street Crash
2000 Dot-Com Bubble
2008 Global Financial Crisis
The global financial crisis began in 2007-2008 as a result of rising housing prices and subprime lending in the United States that led to defaults and losses for many banks and financial institutions. As the crisis spread, it caused stock market declines, a slowdown in economic activity, and concerns over the stability of major financial institutions around the world. Central banks responded by cutting interest rates and providing liquidity, while governments bailed out major banks and implemented economic stimulus programs. The crisis had significant impacts on unemployment, trade, foreign direct investment, and growth in both developed and developing countries worldwide.
Overview about The financial Crisis in 2008. The presentation with 4 main points: reasons, development (also including responses), and consequences.
We hope that this is an easy source of information for you to understand this crisis.
The document summarizes the subprime mortgage crisis that began in the United States in 2007 and its impacts globally. It discusses how loose lending practices in the US housing market led to a bubble that burst in 2006-2007. This caused ripple effects through the global financial system as US and European banks and financial institutions suffered huge losses, leading to a lack of liquidity and credit, government bailouts, and falling stock markets worldwide. While the crisis was still unfolding, there were debates around how long recovery might take and whether more reforms were still needed to stabilize the financial system.
The economic depression of the 1930s, known as the Great Depression, originated in the United States in 1929 and lasted until 1939. It was the longest and most severe depression in modern history, resulting in widespread unemployment, poverty, and deflation as gross domestic product and global trade fell sharply. The causes included stock market crashes, drought, declining asset prices, bank failures, debt deflation, and the Smoot-Hawley Tariff Act. Countries began recovering in the early-to-mid 1930s as they abandoned the gold standard and expanded their money supplies, with the U.S. recovery accelerating after 1933 under President Roosevelt's New Deal programs.
Manufacturing and exporting natural resources were Australia’s major industries in from 1913 till after WWII. The Australian economy has boomed and had downturns in the past. Currently the economy is only growing at 3.7% per year, inflation has risen to 4.3% and home loans are at the highest in 22 years. In the future fuel prices may increase, economic growth may decrease and climate changes likely create major economic problems.
world financial crisis 2008 and impact over the tourismGocha Sharvashidze
The 2008 financial crisis was preceded by a long period of rapid credit growth and low risk premiums. It began with the bankruptcy of Lehman Brothers in the US and fears that AIG would fail and take down major financial institutions. This led to write-downs of over $1 trillion for banks in the US, UK, and Eurozone. Interest rates fell sharply during the crisis. Tourism in Europe declined significantly as well.
The document summarizes several major recessions that have occurred since the early 1900s, including:
1) The Great Depression of 1929, which was precipitated by the crash of the American stock market in October 1929 after a period of rampant speculation. The crash led to a loss of wealth and widespread unemployment that affected the global economy.
2) The early 1990s recession which began with Black Monday in October 1987 when the Dow Jones lost over 20% of its value in a single day, and a mini-crash in 1997 that halted trading on the NYSE.
3) The 2008-2009 recession, the worst since the Great Depression, which was caused by failures of large financial institutions in the United
The document provides details about the Great Depression that occurred from 1929 to the late 1930s. It describes how the stock market crash of 1929 led to widespread bank failures as people withdrew their deposits. This caused many businesses to cut wages or lay off workers, resulting in high unemployment. Some key effects included a 30% drop in GDP, mass unemployment, reduced industrial production and exports, and social impacts such as migration within the US. The Depression affected other countries globally due to reduced international trade and their dependence on exporting to the US and other nations.
The document provides an overview of the American economy including its general history, current levels of unemployment, household debt, and consumer confidence. It notes that the US has the largest national economy and was the largest manufacturer in the 19th century. Recently, unemployment has fallen under President Obama due to gains in the private sector, household debt is growing more slowly but consumers may be adding debt again, and consumer confidence declined from higher fuel prices and inflation expectations. In conclusion, the economy is slowly recovering influenced by many interconnected factors.
The document discusses the global economic crisis of 2007-2009. It provides details on:
- How the US recession impacted other major economies like China, Europe, and Japan through decreasing exports and economic growth.
- Countries like India saw declines in sectors like IT and manufacturing that relied on US demand.
- The crisis had varying effects around the world, with some countries like Australia avoiding recession and others like Africa being less impacted due to less integrated markets.
- The downturn revealed weaknesses in many economies and their reliance on stable global demand, testing their financial systems and regulations.
The 2008 global economic crisis started in the US housing market but spread globally. It began as a financial crisis caused by factors like the housing bubble, poor lending practices, derivatives like CDOs and CDS, and excessive leverage or debt. This led to $30 trillion in destroyed financial assets worldwide. Governments implemented fiscal stimulus programs while central banks lowered interest rates to rescue economies. However, the full effects were prolonged and experts said recovery would not be until 2010 or beyond. New financial reforms have been introduced but regulators still struggle to prevent future crises given the pace of innovation and incentive for banks to circumvent rules in pursuit of profit.
Presentation at Texas Christian University\'s AddRan Festival Of Undergraduate Scholarship and Creativity, April 2009 and winner of TCU\'s Economic Department Award to Best Presentation in Economics.
The 2008 Global Financial Crisis was caused by a rise and fall in housing prices, loose monetary policy by the Fed that fueled risky lending, and the collapse of major investment banks due to their leveraged positions. It led to a recession characterized by falling home values, high unemployment, declining manufacturing and automotive industries, and financial losses for colleges. However, some developing countries were less impacted. The crisis also contributed to a shift in global power towards countries like China, India, and Brazil. Governments responded by reducing interest rates, increasing spending on infrastructure, lowering taxes and boosting transfer payments, and establishing funds to provide companies with access to capital.
2008 World Economic crisis, Global Meltdown, Global Financial CrisisJagmeet Singh Bajaj
The 2008 financial crisis was caused by a combination of factors: rising housing prices, risky lending practices, and overreliance on complex financial instruments. When the housing bubble burst, it exposed vulnerabilities throughout the financial system. Major investment banks collapsed and governments had to bail out firms like AIG, Fannie Mae and Freddie Mac. The crisis led to a global economic downturn, trillions in wealth destruction, and high unemployment in many countries. Governments addressed the crisis through stimulus spending, bank bailouts, and new financial regulations aimed at preventing future crises.
This document discusses the global financial crisis that began in 2007. It describes how the crisis was triggered by a liquidity shortfall in the US banking system that resulted in collapsed financial institutions. The crisis contributed to business failures, declines in wealth, government financial commitments, and reduced economic activity worldwide. Housing markets also suffered with increased foreclosures. The crisis is considered the worst since the Great Depression. Multiple causes have been proposed and governments have implemented regulatory and monetary policies to stimulate economies and stabilize financial markets.
The document discusses the effects of the subprime crisis and Eurozone crisis on the world economy. It provides background on subprime loans and how loose lending standards contributed to the subprime crisis. The crisis spread through losses by financial institutions and investors, decreasing confidence and impacting markets. The Eurozone crisis began with Greece's debt problems and spread to other European nations with high debt levels. Causes included slow growth, shrinking credit, increased government spending, and austerity exacerbating issues. Both crises led to impacts like rising unemployment, falling business activity, and economic impacts.
Term paper written for graduate economics course covering the causes of the 2008 global financial crisis and outlining the September 2009 G-20 meeting as it related to addressing the issue.
The document discusses the financial crisis of 2007-2009, known as the subprime mortgage crisis and real estate crisis. It was the worst financial crisis since the Great Depression. The total cost to the US economy was $600 billion and the rescue plan cost an estimated $1 trillion. Easy credit conditions, housing price declines in 2006, financial innovations, and deregulation all contributed to the crisis. Effects included impacts on the US and global economies, with global economic growth slowing down significantly. Responses included the US government purchasing troubled assets worth $700 billion and various measures by the Jordanian government to maintain stability, such as interest rate cuts and guaranteeing bank deposits. Lessons included the effects of globalization and the important role of
Global economic crisis(2008), and i̇ts effect in Lithuania and Other Baltic c...Khaalid Barre
This article discusses the 2008 global economic crisis and its effects in Lithuania. It describes how Lithuania experienced rapid economic growth before the crisis, with GDP increasing 10.3% in some years. However, the country was unprepared for the crisis. When it hit in 2008, Lithuania's GDP declined sharply by about 15%. Like other Baltic states, Lithuania faced issues like production decreases, unemployment, inflation, and lower foreign investment. The government took some steps that lacked responsibility, like austerity measures that reduced incomes and consumer demand, weakening the domestic market further. Reviving Lithuania's economy required restoring population incomes and consumer demand.
Major Market Crises of History: Reason and Effect YRS1204
There are many market crises that happened over the last 150 years, three of the major ones are discussed in the presentation which are:
1929 Wall Street Crash
2000 Dot-Com Bubble
2008 Global Financial Crisis
The global financial crisis began in 2007-2008 as a result of rising housing prices and subprime lending in the United States that led to defaults and losses for many banks and financial institutions. As the crisis spread, it caused stock market declines, a slowdown in economic activity, and concerns over the stability of major financial institutions around the world. Central banks responded by cutting interest rates and providing liquidity, while governments bailed out major banks and implemented economic stimulus programs. The crisis had significant impacts on unemployment, trade, foreign direct investment, and growth in both developed and developing countries worldwide.
Overview about The financial Crisis in 2008. The presentation with 4 main points: reasons, development (also including responses), and consequences.
We hope that this is an easy source of information for you to understand this crisis.
The document summarizes the subprime mortgage crisis that began in the United States in 2007 and its impacts globally. It discusses how loose lending practices in the US housing market led to a bubble that burst in 2006-2007. This caused ripple effects through the global financial system as US and European banks and financial institutions suffered huge losses, leading to a lack of liquidity and credit, government bailouts, and falling stock markets worldwide. While the crisis was still unfolding, there were debates around how long recovery might take and whether more reforms were still needed to stabilize the financial system.
The economic depression of the 1930s, known as the Great Depression, originated in the United States in 1929 and lasted until 1939. It was the longest and most severe depression in modern history, resulting in widespread unemployment, poverty, and deflation as gross domestic product and global trade fell sharply. The causes included stock market crashes, drought, declining asset prices, bank failures, debt deflation, and the Smoot-Hawley Tariff Act. Countries began recovering in the early-to-mid 1930s as they abandoned the gold standard and expanded their money supplies, with the U.S. recovery accelerating after 1933 under President Roosevelt's New Deal programs.
Manufacturing and exporting natural resources were Australia’s major industries in from 1913 till after WWII. The Australian economy has boomed and had downturns in the past. Currently the economy is only growing at 3.7% per year, inflation has risen to 4.3% and home loans are at the highest in 22 years. In the future fuel prices may increase, economic growth may decrease and climate changes likely create major economic problems.
world financial crisis 2008 and impact over the tourismGocha Sharvashidze
The 2008 financial crisis was preceded by a long period of rapid credit growth and low risk premiums. It began with the bankruptcy of Lehman Brothers in the US and fears that AIG would fail and take down major financial institutions. This led to write-downs of over $1 trillion for banks in the US, UK, and Eurozone. Interest rates fell sharply during the crisis. Tourism in Europe declined significantly as well.
The document summarizes several major recessions that have occurred since the early 1900s, including:
1) The Great Depression of 1929, which was precipitated by the crash of the American stock market in October 1929 after a period of rampant speculation. The crash led to a loss of wealth and widespread unemployment that affected the global economy.
2) The early 1990s recession which began with Black Monday in October 1987 when the Dow Jones lost over 20% of its value in a single day, and a mini-crash in 1997 that halted trading on the NYSE.
3) The 2008-2009 recession, the worst since the Great Depression, which was caused by failures of large financial institutions in the United
The document provides details about the Great Depression that occurred from 1929 to the late 1930s. It describes how the stock market crash of 1929 led to widespread bank failures as people withdrew their deposits. This caused many businesses to cut wages or lay off workers, resulting in high unemployment. Some key effects included a 30% drop in GDP, mass unemployment, reduced industrial production and exports, and social impacts such as migration within the US. The Depression affected other countries globally due to reduced international trade and their dependence on exporting to the US and other nations.
The 1997-1998 Asian Financial Crisis had spill over effects on the United States economy through trade, capital flows, and financial market interlinkages. It reduced U.S. exports to Asia but boosted some domestic sectors. Specific industries like high-tech, agriculture, and textiles saw declines in exports to Asia, while financial institutions and some businesses faced losses. However, overall the crisis led to lower interest rates and inflation in the U.S. which stimulated the domestic economy.
The document defines a recession as two consecutive quarters of declining GDP according to the National Bureau of Economic Research. It then summarizes several historical US recessions from the 1930s to the Great Recession of 2007-2009, including their duration, GDP decline, unemployment rates, and primary causes such as financial crises, wars, and changes in government policy. Common effects of recessions are listed as bankruptcies, unemployment, and deflation. While India was less impacted than other countries, its growth declined and key sectors like IT, banking, and automobiles were affected.
The document discusses recessions over time and analyzes the current global recession of 2009. It compares factors like duration, impact on unemployment and GDP, and leading economic indicators. While the 2009 recession is more widespread than previous recessions, emerging economies like India and China are still expected to see growth. The recovery may take until 2014, led by growth returning to China and India, but the conditions of the 2009 recession are not expected to be as severe as the Great Depression.
The document discusses recent global economic and political events. It notes that the US government shutdown hurt business confidence and economic growth. However, the US economy is recovering with rising employment, improving housing and retail sectors. It also discusses the impacts of fracking in increasing US oil and gas production. The document analyzes economic conditions and outlooks in various countries and regions including Europe, China, Japan, emerging markets, South Africa and the UK. It provides investment ideas focused on sectors benefiting from global growth trends.
The Great Depression was a global economic slowdown that began in 1929 and lasted until 1941. It started in the United States after the stock market crash of 1929 and became worldwide. Global GDP fell by 15% and unemployment rose as high as 33% in some countries. The New Deal policies of Franklin D. Roosevelt in the 1930s helped spur economic recovery in the U.S., while World War II ultimately ended the Depression worldwide by increasing spending and demand.
The document compares several major financial crises from 1929 to present day. It summarizes the key causes and impacts of each crisis, including the Great Depression, Black Monday, the European Exchange Rate Mechanism crisis, the Global Financial Crisis, the Greece crisis, Japan's debt crisis, and Brexit. It analyzes factors like leverage, liquidity issues, and policy failures that led to the crises. Economic indicators like GDP, unemployment, inflation, and stock market losses are compared across the different crises. Overall lessons on regulation, coordination, and stability of exchange rate mechanisms are discussed.
The document summarizes the causes and effects of the Stock Market Crash of 1929 that led to the Great Depression. It describes how rampant speculation in the roaring 1920s led to an unsustainable bubble. The crash was directly triggered when plans for the Smoot-Hawley Tariff act faced limitations, causing a panic on Black Thursday in October 1929 and a collapse of stock prices over the next few years. The crash had devastating economic effects worldwide and led to FDR's New Deal programs to stimulate recovery.
The document compares the 2008 recession to the Great Depression of the 1930s. It discusses the causes of each event, including the housing bubble and subprime mortgage crisis that contributed to the 2008 recession. For the Great Depression, it mentions the 1929 stock market crash, bank failures, reduction in purchasing, American economic policies, and drought conditions as causes. Both events led to declines in GDP, increases in unemployment, and changes in prices - inflation during the recession and deflation during the depression. The document provides an overview of the key economic impacts of each historical downturn.
The Great Depression began with the stock market crash of 1929, known as "Black Tuesday". As stock prices plummeted, margin calls led to mass stock sales that flooded the market and caused prices to drop further in a panic. This collapse of the stock market was the beginning of the Great Depression. As banks had invested heavily in the stock market, many became unstable as people withdrew their money, leading to hundreds of bank failures across the country. Franklin D. Roosevelt was elected president in 1932 on a platform of recovery and reform with his New Deal programs. His administration created numerous agencies and public works programs to provide relief, recovery, and reform to address the economic crisis gripping the nation.
The document provides an overview of the United States economy including key statistics such as GDP, GDP growth rate, GDP per capita, inflation rate, labor force statistics, unemployment rate, main industries, electricity production, oil production and reserves, poverty levels, and national debt. It discusses the country's economic history, monetary policy, government intervention in the economy, and predictions about the future direction of the US economy.
The document provides background information on the causes of the Great Depression. It begins with a warm up asking students to consider what might happen if they lost their savings and job. It then discusses several causes, including a decline in key industries after WWI which led to job losses, overproduction in agriculture resulting in falling prices, high consumer debt levels, an unequal distribution of wealth, and the stock market crash of 1929. The effects of the Great Depression were widespread hardship as unemployment rose to 25% and people lost homes and means of support.
This document discusses the current economic challenges and provides suggestions for protecting assets during difficult financial times. It outlines six major obstacles slowing economic recovery, including accumulated debt, wealth destruction, declining incomes, the slow pace of government rescues, sinking confidence, and how to finance government programs. Specific concerns mentioned include declining asset prices, taxes, inflation, and unknown factors. The document recommends building cash reserves, selling bonds, considering inverse ETFs and gold funds, avoiding high-risk investments, and being wary of fraud. It offers to provide ongoing information and answers questions to help investors navigate the challenging environment.
Overview of GLOBAL FINANCE CRISIS and impact with market. Impacts of the US Financial Crisis on Indian Economy. FINANCE CRISIS, Subprime Mortgage Crisis, US Financial Markets, US Unemployment and Stock Market Returns, Treasury Rates and Inflation,
11.3 causes of the great depression 1930 1933jtoma84
The document outlines several causes of the Great Depression in the United States, including an uneven distribution of income and wealth, overproduction coupled with underconsumption, widespread use of credit to purchase stocks, protectionist trade policies that reduced international commerce, and speculation on the stock market that led to the 1929 crash. The Depression had devastating impacts across the US economy in the 1930s, with high unemployment, thousands of bank and business failures, plummeting incomes, and increasing poverty, homelessness, and hunger.
The Great Recession document summarizes the causes and effects of the late-2000s financial crisis and recession in the United States. It discusses how a housing bubble fueled by subprime lending burst, triggering a credit crunch and widespread economic impacts. The recession resulted in job losses, rising unemployment, and high foreclosure rates. Government responses included stimulus packages under Presidents Bush and Obama, as well as financial bailouts. The recovery was predicted to be slow due to persistent effects of financial crises on economic growth.
2. Roaring 1920s (economy) Annual income increase: more than 15% (1923-1929) Real income rose: 10.5% per year from 1921 to 1923 3.4% from 1923 to 1929 1919-1929, total factor productivity increased by 5.3% 1928-1929, GNP increased about 6.6% Technological developments: radio, telephone, automobile, air-condition, refrigerator, washing machine.
3. Welcome to the Stock Market Eight straight years rise in stock values: 218.7% Mid 1920s’ real growth and prosperity Boundless hope and Optimism New American Characteristic (get rich quickly with a minimum of physical effort) Consumer Credit: $2.6billion (1920) $7.1billion (1929) Buying on Margin
4. Black Thursday(Oct 24th, 1929) Major Panic The nation’s most powerful financiers met to stop the panic Thomas Lamont: “There has been a little distress selling on the Stock Exchange due to a technical condition of the market” 12.8 million shares had been sold DJI: 21 percent decline from the high of 381.2 (Sept 3rd,1929) to 299.5. Drop of 9% from Oct 23rd President Herbert Hoover said that the economy was fine on Friday, Oct 25th
5. Black Tuesday(Oct 29th, 1929) The most notorious day in American financial history 16.4 million shares were sold Dow Jones lost another 12 percent Nearly $16 billion in market value (about $121 billion in 2007) evaporated Twenty-nine public utilities lost $5.1 billion in the month The market closed down 12.8 percent on Monday, Oct 28th
6. Allied Chemical & Dye General Electric Montgomery Ward Radio Corp. of America U.S. Steel
7. A Catalogue of NINE Causes Stock market value was too high Real downturn in business activity The subsequent raising of interest rates in London and liquidation of English investments in the United States Actions of the Federal Reserve Media and government figures Buying on margin and margin-call Excessive leverage used in utility sector Setback in the public utility market Overreaction by the market
8. Federal Reserve Actions Before the crash Raised interest rate (loan to brokers and buy on margin) During the week of the crash (final week of October) Expand credit and bolster shaky financial positions Added almost $300 million to the reserves of the banks Doubled its holdings of government securities: - adding over $150 million to reserves Discounted about $200 million more for member banks Lowered its rediscount rate from 6 to 4.5% (by mid-Nov)
13. The Great Depression Companies’ bankruptcy Stockbrokers were ruined Bank Crisis The confidence in the nation’s economy was lost. National unemployment rate – 25 percent Average weekly wage: had fallen from $25 to $17 About two out of every three children in NYC were sick Homeless and hungry Revenue Act of 1932 - increased taxes: personal income, estate, sales, postal rates - surtaxes: from 25 % to 63 % on the highest incomes
14.
15. From 1929 to 1932, stocks lost 73 percent of their values.
The 1920s were period of real growth and prosperity.From 1923 to 1929, the average annual earning of American workers increased by more than 15%.Real income rose 10.5 % per year from 1921 to 1923 and 3.4 % from 1923 to 1929.During the period 1919-1929 total productivity increased at an annual rate of 5.3 % for the manufacturing sectorThe gross national product (GNP) increased about 6.6%Consumer revolution
From 1922 to 1929 stocks rose in value by 218.7%American prosperityfrommid 1920s made consumers and investors very optimistic about the future of America and American stock market.Hence, the majority of the people believed that everything was going to be great.People were start getting tangled with inordinate desire to get rich quickly with a minimum of physical effort. Since the stock value had always been increased in recent years, buying stock seemed like an unbounded opportunity to make a fortune that couldn’t go wrong. Credit purchasing planswere introduced in the 1920s. Under these plans, buy now pay later became a way of life. Consumer credit went up from $2.6 billion in 1920 to $7.1 billion in 1929, the largest jump in the country’s history.
By Oct 24th, the value of most stocks had been falling for more than six weeks. So, investors rush to sell their shares in order to cut their losses which caused the stock market to drop even faster. Thenation’s most powerful financiers tried tostop the panic by bidding on a number of high-profile stock. Thomas Lamont, the senior partner of Morgan’s: “There has been a little distress selling on the Stock Exchange due to a technical condition of the market”rather than any fundamental cause.They hoped that when investors saw that they were willing to buy stocks, the investors would follow their example. But the panicked sell-off continued, and when the day’s trading finally ended, more than 12.8 million shares had been sold. President Herbert Hoover addressed the nation on the following Friday, Oct 25th. He tries to reassure Americans, saying that the economy was fine. The selling, however, still continued on Black Monday. On black Monday the market lost 12.8 percent of its value, far worse than on the previous Thursday.
October 29th. It remains the single most notorious day in American financial history. Its closing had surpassed 16.4 million shares. Stocks lost nearly $16 billion in market value-about $121 billion in 2007 dollars. 29 public utilities lost 5.1 billion in the month, by far the largest loss of any of the industries listed by the Times. It was the day that brought the world’s greatest economic superpower to its knees. The stock market crash destroyed hundreds of corporations across America and blew away the life savings of hundreds and thousands of investors.
The stocks that went up the most were in industries where the economic fundamentals indicated there was cause for large amount of optimism. They included airplanes, agricultural implement, chemicals, department stores, steel, utilities, telephone and telegraph, electrical equipment, oil, paper, and radio.The best representatives of industries that had expectations of growth. On September 3rd, 1929, the Dow Jones Industrial Average reached a record high of 381.2
2. American industries were soon producing far more goods than they could sell. They were still selling shares to eager investors, who believed the stock would increase in value. If the companies weren’t selling all of their goods, however, they weren’t making profits. The shares, therefore, weren’t worth as much as people thought. Sooner or later, that fact would cause a serious problem.3. On September 26, the Bank of England raised its discount rate from 5.5 to 6.5%. England was losing gold as a result of investment in the New York Stock Exchange and wanted to decrease this investments. The Hatry Case also happened in September and created uneasiness in England regarding stocks in general. Both the collapse of the Hatry industrial empire and the increase in the investment returns available in England resulted in shrinkage of English investment in the United States, adding to the market instability in the beginning of October. 4. Federal Reserve5. If the media say something often enough, a large percentage of the public may come to believe in it. By 1929, there were many who felt the market price of equity securities had increased too much, and this feeling was reinforced daily by the media and statements by influential government officials.6. Federal Reserve Fund invested in common stocks and helped finance the purchase of common stocks by others. Buying on margin. Many people who invested in the stock market did not have enough money to buy shares of stock, so they paid a little bit and borrowed the remaining money from the brokers who were selling them the stock. At that time, people could buy $10000 worth of stock by $1000, which means that its down payment was 10%. From day of people buying on margin, the situation got completely out of control. Buying on margin worked well as long as stock prices continued to rise. Margin Call. If a stock suddenly lost its value, there would be a chain of debtwith just some worthless stock at the end of it. During September brokers’ loans increased by nearly $670 million, by far the largest increase of any month on date.7. The amount of leverage used in the utility sector was enormous. Public utility holding companies also added their leverage to the already levered utility sector.8. In 1929, public utility stock prices were in excess of three times their book values. The rule applied by regulatory authorities is to allow utilities to earn a “fair return” on an allowed rate base. The fair return is defined to be equal to a utility’s weighted average cost of capital. The deluge of bad news regarding public utility regulation by commissions in Massachusetts and New York truly upset the market.
Federal Reserve Board was an official group that kept an eye on the nation’s banks and was alarmed by enormous amount of money that banks had loaned to brokers so people could buy on margin. Members of the Federal Reserve Board feared that any drop in stock value would make investors unable to repay brokers. Brokers then would not be able to repay banks, and the nation’s banking system would be at risk.Raising Interest Rates. This rise would make it more expensive for people to borrow money and the board hoped the cycle of borrowing and buying would then slow down. But American investors went on buying stocks with little or no understanding of their value. The stock market continued to rise throughout the summer of 1929. Due to the tragic incident in the stock market, Federal Reserve stepped in immediately to expand credit and bolster shaky financial positions. During the week of the crash – the final week of October – it added almost $300 million to the reserves of the nation’s banks. During that week, Federal Reserve doubled its holdings of government securities, adding over $150 million to reserves, and it discounted about $200 million more for member banks. The Federal Reserve also promptly and sharply lowered its rediscount rate, from 6 % to 4.5% by mid-November.
The market that was falsely stimulated by artificial credit, and began to move upward again.
There are three main problems that a theory of depression must explain. 1. First is errors in forecasting. Business activity moves along nicely with most business firms making handsome profits. Suddenly, without warning, conditions change and the bulk of business firms are experiencing losses. They are suddenly revealed to have made terrible errors in forecasting.2. Another common feature of the business cycle is price change in capital-goods industries. Capital-goods industries fluctuate more widely than do the consumer-goods industries. The capital-goods industries- especially the industries supplying raw materials, construction, and equipment to other industries- expand much further in the boom, and are hit far more severely in the depression.3. A third feature of every boom that needs explaining is the increase in the quantity of money in the economy.An increase in the supply of money, the demand for money remaining the same, will cause a fall in the purchasing power of each dollar.Central bank printed money and lend it to business. The new money pours on the loan market and it lowers the loan rate of interest.“lower” – near the consumer“higher” – furthest from the consumer
Laissez-faire was, roughly, the traditional policy in American depressions before 1929. It means leave the economy alone. So the proper injunction to government in a depression is cut the budget and leave the economy strictly alone. “Hoover New Deal” is an anti-depressionprogram marked by extensive governmental economic planning and intervention.It includes bolstering of wage rates and prices, expansion of credit, propping up of weak firms, and increased government spending. As his admiring biographers declared that “President Hoover was the first President in our history to offer Federal leadership in mobilizing the economic resources of the people.” Due to the economic struggle, President Hoover held a series of White House conferences with the leading financiers and industrialists of the country to induce them to maintain wage rates and expand their investments. Such artificially induced expansion could only bring losses to business and thereby aggravate the depression. The most important White House conference was held on November 21. All the great industrial leaders were there and asked Hoover to stimulate the cooperation of government and industry. Hoover pointed out to them that unemployment had already reached two to three million, that a long depression might follow, and the wages must be kept up! From an economic viewpoint such action would deepen the depression by suddenly reducing purchasing power. In a result of the conference, the nation’s leading industrial leaders agreed to maintain wage rates and expand their investments. Industry should try to keep everyone employed, and any necessary reduction in work should be spread over all employees by reducing the work-week.
Gross National ProductGross Private Product
The cause of the depression was not a failure of the free market, yet it rather caused by government planning. After the crash, the worth of companies vanished. Stockbrokers were ruined when investors couldn’t pay back the money they owed from buying on margin. Many investors lost everything they had. Large and small companies began to lay off workers and close factories when sales of their goods dropped. The Great Depression has begun. Banks, too, were hurt by the rapidly worsening economy. Those banks that had loaned money to brokers and investors found themselves short of funds. By the end of 1930, more than 7000 banks had failed. It was one of the most costly errors committed by banking system in the last 82 years. And the confidence in the nation’s economy was lost. During President Hoover’s term, the average weekly wage of workers had fallen from $25 to $17. One million families lost their farms. About one in every four workers in the Unites States was without a job (25% national unemployment). About two out of every three children in the NYC were sick because they didn’t have enough food to eat. Millions of people were homeless and hungry. By 1932, the U.S faced the worst economic crisis in its history. With a $2 billion deficit during annual year 1931, Hoover felt that he had to do something in the next year to combat it. To reduce expenditure and balance the budget, he raised taxes. Revenue Act of 1932 is one of the greatest increases in taxation ever enacted in the United States in peace time. This drastic increases of taxes included personal income taxes, estate taxes, sales taxes, and postal rates. And surtaxes increased were raised enormously, from 25% to 63 % on the highest incomes. Although the tax rates increased significantly, total Federal revenue for 1932 declined because of the deepened depression- which itself partly caused by the increase in tax rates.
The crash helped bring on the depression of the thirties and the depression helped to extend the period of low stock pricesOn July 8th 1932, the huge tragedy in the stock market hit its bottom which was 79.4From 1929 to 1932, stocks lost 73 percent of their value. And 1932 was a worldwide depression.