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Khaled BitarWhat were the causes of the 1929 line of work merchandise crash and the 1987 subscriber line market crash? What are the differences between the causes?In the 1920s acquit was first issued by companies. Companies issued stock by and by they went ordinary in order to make property. When traders buy stock, they were buying from the company and a stake in the company. On October 24, 1929, (a.k.a. Black Thursday) the stock market deteriorate 9% and five days later the market fell an remarkable 17.3%. About 29 million shares of stock changed owners make, at the time, the biggest stock market crash in the history of the United States. In the decade forrader the crash, America was thriving and production was soaring. The gross national product increased by 40% and average income grew 30% throughout the decade. There was an abnormally high take of investment and traders were overwhelmed with confidence. When the stock market crashed on Black Thursday, traders were s till surefooted because of President Hoovers declaration that a recovery was imminent. despite the general optimism, the market crashed again causing the great depression. The effects were devastating. everyplace the next three years, the unemployment rate rose to 13.6 million people and GNP decreased 45 million dollars. There are many causes to the 1929 stock market crash including speculation, WWI, Foreign investment, and a scandal that could have vie a minor role.The 1929 stock market was a bull market fueled by speculation. Speculation inflated stock prices beyond what they were worthy because of the large amount of traders. Speculation is when traders think that a stock has very much more value and potential then it really does. Traders would buy a stock that they think is thriving and when they realize that the company is losing money, they sell causing the market to decrease. (i.e. people investing in ebay and then selling after seeing ebays earnings.) Many investors we re not very experienced and they believed that whenever their stock went down, they felt selling was the best option which fueled the crash plane further. Because of the thriving market, many loaned money from banks and invested in the stock market. When it crashed, they could not establish back the loans and the banks lost money. The market misled the banks as they thought loaning traders money would be very lucrative. The Federal Reserve was a cause of the 1929 stock market crash because it essentially owned the government and fueled the speculation.