Countdown to the Crash

January 1929 – September 1929: Herbert Hoover is elected president, and the stock market grows rapidly causing stock prices to skyrocket; this is known as the ‘Hoover Bull Market’.

Investors begin making millions off the stock market, causing the popularity of investing to grow. More investors purchase stocks on margin, and mortgage their properties; injecting ‘borrowed’ money into the market. Additionally, more debt is issued through holding companies.

During the summer, an economic recession begins and the Federal Reserve increases the discount rate limiting the amount of available credit.

September 3rd: The stock market peaks at ‘381’.

September 4th – October 17th: The market plateaus and investors begin to speculate. Prices fall 17% during this period, creating doubt as to the stability of the market.

October 18th: Market enters ‘free fall’. Investors enter a buying and selling frenzy.

October 24th, “Black Thursday”: Prices continue to dip causing investors to sell their stock and limit their losses. Panic soon begins as banks and corporations buy up large amounts of stock in a futile attempt to save the market.

October 28th, “Black Monday”: Investors continue to exit the market, increasing the speculation and further fueling the panic from Thursday. A record number of shares are traded as investors back out of their stocks. The NYSE plunges a staggering 13% in one day.

October 29th, “Black Tuesday”: Prices fall sharply as 16 million shares of stock are traded, mostly on borrowed money. Securities collapse and many stocks become worthless. On this one day, the Dow Jones falls 11%. The day marks the start of the “The Great Depression”.