The stock market crash of 1929, one of the darkest periods in American history, almost seemed to come as a surprise to those who experienced it. Due to the luxurious spending habits of the aristocrats, it was a time of opulence and excess. These habits were quickly followed by a period of inattention, apathy towards moderation, lack of frugality with focus on instant gratification. In the days before the crash was officially declared, the panicked crowd only exacerbated the problems at hand by hastily selling or buying stocks at a frenetic pace. These factors, along with the popularity of bonds and credit cards, are some of the main reasons for the crash (History.com Staff. “Stock Market Crash of 1929.”). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay The Roaring '20s, an exciting time after the tragedies of World War I, remained one of the most frivolous decades in U.S. history. There was a huge rush to buy. (Stern, Laurence. “A wave of buying sweeps the market as stocks swing higher. Radio flashes overhead; General Motors and Steels soar.) Even ordinary men and women tried their hand at the stock market that was previously left to professionals. This abundance of new investors in the game has led to a superfluous amount of shareholders constantly changing the market (Brennan, Kristine. The stock market crash of 1929). many errors. These antecedents may have ushered in the Great Depression (History.com Staff. “The Roaring Twenties.”). One of the primary factors in the crash was caused by bonds, a debt investment in which an investor lends money to an entity such as a company bonds in which an investor can finance himself, including Liberty Bonds, originally a very popular purchase, were initially supposed to help the Allied movement in the First World War. This patriotic duty spread to the United States during the rise of nationalism. The bonds were supposed to promise financial security during post-war times. During the unfortunate circumstances of 1929, shareholders anxiously began cashing out their government bonds in such massive quantities that the banks did not have the money on hand and could not repay them. Other investments such as brokerage firms, mutual funds and margin accounts have also had treacherous consequences during this period. These investments purchased with borrowed funds caused an initial increase in stock prices until the month before the stock market crash. This borrowed money, of which 90% was not paid, was invested in the stock markets. All this led to wasteful spending that later had unfortunate consequences for ordinary people (Richardson, Gary, Alejandro Komai, Michael Gou and Daniel Park. “Stock Market Crash of 1929.”). Excess credit allowed people of all types and statuses to spend their money in ways they deemed wise investments. Investment advice was given by everyone from brokers to neighbors. A popular idea was to buy land cheaply. Buyers were promised good land at low prices, making them richer when the time came to sell. Florida was a trendy place to buy land, and to later investor disillusionment, land was shoddy, barren, and nearly worthless during this time period. Whenthe time came for the investors to sell the land, they could no longer do so. This left those who had purchased on credit short of funds and unable to repay the loan, which in turn also destroyed the real estate economy (Brennan). Buying on credit became a popular idea because the money would not have to be paid up front, thus allowing anyone who wishes to satisfy their every whim. As many began to spend on their every whim, the majority had faith in the economy and felt that they would be able to pay.Later. Of course, when they were unable to repay their loans; like a snowball effect, this would start to influence stocks. The gap between rich and poor also played a major role in the collapse. Since the rich had invested most of their money on Wall Street, when they quickly withdrew all their funds from the banks, Wall Street was destined to collapse; the remaining money, belonging to the poor, could not save him. (Brennan.) Black Thursday foreshadowed the tragic events that were to come. On October 24, the day began with stocks selling off as quickly as they always have. Then air pockets began to appear in stocks. The term air pocket refers to when people did not come forward to buy stocks at any price. (Brennan.) Even the most popular stocks were unable to sell as usual. Things had gotten so bad at the New York Street Exchange, also known as the NYSE, that the exchange was closed at 12:30 pm that day, in an attempt to hide the panic that was occurring on the floor. Soon after, those occupying the gallery were thrown out and into the crowd that had already gathered on Wall Street. (“Stock Market Crash of 1929.” Britannica School.) As time passed, the situation only began to deteriorate, leading to a day known as “Black Tuesday.” The situation worsened on October 28, 1929. Most investors unfortunately turned to their bankers and traded nearly 16.5 million shares that day. The NYSE Board of Governors also met that day to consider closing the exchange itself. The board has not officially made a decision. For fear that the public would panic in this situation, they left it as it was. Between the first and second meetings the exchange had become stable enough to convince the council to continue the exchange. The next day the press realized that the stock market's golden age was coming to an end. The city's banks had decided to fill the gaps and began withdrawing their money. They capped cash percentages and forced brokers to reduce lending by 40% to 25%. Brokerage firms have reduced their margins to no more than 25%. On Halloween of that year, the Federal Reserve lowered the rediscount rate from 6 to 5 percent to discourage bank runs. They also started buying bonds to stop people from running to banks to withdraw cash. From November 1st to November 4th the NYSE was closed. This was no vacation for the brokerage firm. Instead, during this pause they worked to correct the accounting problems that emerged during the chaos of the last week. They also continued to sell orders despite the trading suspension. (Brennan.) Black Monday and Black Thursday were both preceded thirty years earlier by Black Friday. Black Friday was an early sign of everything that could go wrong in the stock market, caused by many factors, the main it was a man named Gould. Wall Street experienced its first “Black Friday” on September 24, 1869. The reason for this panic was not the stock market,.)