The stock market crash of 1929 played an important role in our nation's history. After the crash, United States turned to a great depression from its greatest period of prosperity. There are differences and similarities between the stock market of 1929 and the stock market of 2006.
Unlike the stock market today, the government had no control over the market in 1929.
çThere were no laws to guide the market in 1929. As a result, the large investors ruled the market to increase their wealth.
çUnethical activities, like insider trading, emerged in the stock market of 1929.
çThe government regulates stock market today. The Securities and Exchange Commission was established to punish people who violate it in today's market.
The stock prices in 1929 were over-valued which were much higher than today.
çThere were some stocks doubled its value in 1929. They reached the highest in the history.
çInvestors in 1929 had enough confidence to believe that they couldn't go wrong buying stocks.
Moos to Trade
English: Crowd gathering on Wall Street after the ...
A solemn crowd gathers outside the Stock Exchange ...Many Americans, including the poor workers, began to buy stocks to get great profits.
çBuying stocks was considered to be very risky now. Stock prices are related to performance.
Investors in 1929 started to buy stocks on margin, which was still a method of buying stock in today's market.
çIn 1929, the poor workers could "buy now pay later" in the stock market. Then, they could use plans like monthly payment for the rest of the money. At that time, investors only needed to put down only 10% cash in order to buy stocks.
çPeople are still buying stock on margin now, but it is strictly controlled.
The banking system was worse in 1929 than now.
çMoney was available for more people at a lower interest rate from banks in 1929. After the banks were heavily invested...