Buying On Margin Great Depression Page

People weren't buying stocks because the companies were profitable; they were buying because they expected the price to go up tomorrow. This is the definition of a speculative bubble. As long as prices climbed, the system held. But margin buying has a "trap door" called the The Trap Door: The Margin Call

In the 1920s, the stock market wasn't just for the elite; it was a national pastime. To make entry easier, brokers offered "margin loans." Here is how the math worked: buying on margin great depression

By 1929, an estimated was out on loan to stock speculators—more than the total amount of currency circulating in the United States at the time. This massive influx of borrowed money disconnected stock prices from the actual value of the companies. People weren't buying stocks because the companies were