HST 210 Lecture Notes - Lecture 10: Stock Market, Government Failure, Insider Trading
Document Summary
Re(cid:272)kless spe(cid:272)ulatio(cid:374) i(cid:374) the sto(cid:272)k (cid:373)a(cid:396)ket i(cid:374) the (cid:1005)9(cid:1006)(cid:1004)"s se(cid:374)t sto(cid:272)k p(cid:396)i(cid:272)es soa(cid:396)i(cid:374)g (cid:271)e(cid:455)o(cid:374)d their real value. People bought stocks on margin (with as little as 10% down) contributing to the overinflated prices and the crash. Hyper consumption as a hallmark of american society. Soaring stock prices rise on the assumption of continued growth, once that assumption is shaken the market has nowhere to go but down. Oct 1929- bubble bursts and stock prices plummet (37% in one day: the us stock market declined a staggering 89% between 1929 and 1939. Panic across major stock exchanges such as the nyse: people selling assets left such as cars to climb out of debt. E(cid:272)o(cid:374)o(cid:373)(cid:455)"s depe(cid:374)de(cid:374)(cid:272)e o(cid:374) a fe(cid:449) (cid:271)asi(cid:272) i(cid:374)dust(cid:396)ies (cid:894)auto(cid:895) a(cid:374)d o(cid:448)e(cid:396)p(cid:396)odu(cid:272)tio(cid:374) i(cid:374) those industries. U(cid:374)e(cid:395)ual dist(cid:396)i(cid:271)utio(cid:374) of (cid:449)ealth (cid:894)top . (cid:1009)% of a(cid:373)e(cid:396)i(cid:272)a(cid:374)s o(cid:449)(cid:374)ed (cid:1007)(cid:1008). (cid:1008)% of the (cid:374)atio(cid:374)"s wealth)
