The Great Depression ~ 1929-1939 POST WW I~ All nations will suffer economic hardships The economic...
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Transcript of The Great Depression ~ 1929-1939 POST WW I~ All nations will suffer economic hardships The economic...
The Great Depression
~1929-1939 POST WW I~• All nations will
suffer economic hardships
• The economic collapse began here in NYC; Wall Street
• October 29, 1929… Tuesday
MANY LOST THEIR HOMES
The Roaring 20’s in the U.S.A.• The new concept of “credit”
–buying things without money (early form of credit cards)
• Americans were buying:– New Kitchen Appliances &
Clothes – New Cars– And investing in the Stock
Market… to make more $$$ • Fun times reigned
– Many are working – Parties are had everywhere…
times are good!– The Great Gatsby (famous
book)
FLAPPER
Why was this bad?• Credit system
–People didn’t really have the money they were spending on new items
• WWI–The U.S. was a major credit loaner to France, England and many Euro. Nations
AND FINALLY, THE CRASH OF FINANCIAL MARKETS
THE STOCK MARKET CRASHES!CAUSING WORLD WIDE $$$ CRISIS!
What are Stocks? And the Stock Market?
Stocks: A stock is a portion of the ownership of a company. A share in a company gives the owner of the stock a stake in the company and its profits or losses.
Stock Market: The place where stocks are bought and sold… (think Wall Street!)
Let’s Invest in NIKE shoesWe purchase ONE stock on March 2, 2009How much does this cost? $39.76 for one stock
And we decide to sell it on March 30, 2009What is the value of NIKE stock on 3-30-
09?$46.26 for the same stock…
How much $$$ did we make? $6.50!!!
What if we had 10,000 shares?• Let’s say we bought a 10,000 shares on
March 2, 2009…- if it cost $39.76 than we paid $39,760
So now how much $$$ did we make on March 30, 2009…- if the price is $46.26 X 10,000 shares
= $46,260 - $39,760 $6,500 profit in one month
Why did the Stock Market Fail• People bought stocks
on margins—what speculator do– If a stock is $100 you can pay $10 now and the rest later when the stock rose
• Stocks fall– Now the person has less than $100 and no money to pay back
Stock Market Boom and Bust
0
5
10
15
20
25
30
35
Jan-21 Jan-23 Jan-25 Jan-27 Jan-29 Jan-31 Jan-33 Jan-35 Jan-37 Jan-39
Sept. 1929
July 1932
S&P Composite IndexA boom is a time when stock holders make money;
A bust is when stock holders loose money!
Sept. 1929
July 1932
RED LINE IS FOR
PRESENT DAY: US!!
BLACK LINE IS FOR GREAT DEPRESSION
And then…
• With people panicking about their money investors tried to sell their stocks– This leads to a huge
decline in stocks– Stocks were worthless
now• People who bought on
“margins” now could not pay
• Investors were average people that were now broke
• Farmers were already feeling the effects– Prices of crops went down– Many farms foreclosed
• People could not afford luxuries– Factories shut down– Businesses went out
• Banks could not pay out money• People could not pay their taxes
– Schools shut down due to lack of funds
• Many families became homeless and had to live in shanties
Many waited in unemployment lines hoping for a job.
People in cities would wait in line for bread to bring to their family.
Some families were forced to relocate because they had no
money.
MANY FAMILIES HAD VERY LITTLE
LINES FOR FREE SOUPNYC, 1930
COVER OF TIME MAGAZINE
OCTOBER, 2008
DOES THIS PICTURELOOK FAMILIAR?
K-BAIN
• MAY 2, 2009
• Brooklyn Food Conference
• Bring Resume
• Submit form by April 22, 2009