This one is by Noni Mausa...
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While reading about days gone by, I ran across this account, from which I have filed off the serial numbers for the purpose of more clarity:
The crash followed a speculative boom ... which had led hundred of thousands of Americans to invest heavily ... a significant number even borrowing money to buy more... brokers were routinely lending small investors more than 2/3 of the face value ...
The rising … prices encouraged more people to invest; people hoped the … prices would rise further. Speculation thus fueled further rises and created an economic bubble.
[…]
… the market finally turned down, and panic selling started...
… Congress … mandated a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities.
The … crash had a major impact on the U.S. and world economy… The crash marked the beginning of widespread and long-lasting consequences for the United States.
The decline in … prices caused bankruptcies and severe macroeconomic difficulties including business closures, firing of workers and other economic repression measures. The resultant rise of mass unemployment and the depression is seen as a direct result of the crash … it is usually seen as having the greatest impact on the events that followed.
Therefore [it] is widely regarded as signaling the downward economic slide ...
[…]
According to the economist Milton Friedman … the Federal Reserve in the immediate aftermath of the crash did not sufficiently expand the money supply and so turned the recession into a depression.
This is the piece I excerpted...
"Plus ca change, plus ca mem chose" all over again, as Yogi Berra would have said...
Noni Mausa
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This post was by Noni Mausa.
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