The Grapes of Wrath. The loudest falls in the US stock market

Many remember John Steinbeck's cult novel "The Grapes of Wrath" about a family of farmers who went bankrupt during the Great Depression, forced to travel from Oklahoma to California to survive. Today, October 29, marks 91 years since the day of perhaps the most famous stock market crash in history, "Black Tuesday", which marked the beginning of the Great Depression (1929-1932) - October 29, 1929.

The loudest drops in the US stock market

"Black October" 1929. It all started with "Black Thursday", October 24, when all shares began to fall sharply from the beginning of trading, provoking panic among investors. During the day, the Dow Jones index sank 11% from 305.85 to 272.32. The next day, Friday, President Herbert Hoover said that there was a "technical failure", assured the people that there was no danger to the country's economy, even a slight correction had occurred, but a disaster was already inevitable. On Monday and Tuesday, October 28-29, the Dow Jones fell 24.5%. The stock bubble burst. The collapse of the stock exchange set off a chain reaction, the rapid destruction of the entire economy began. The "Great Depression" began - banks that issued loans for the purchase of securities to investors went bankrupt, enterprises that could no longer get loans from banks, because of what millions of people lost their jobs, strikes began on the streets. The collapse of the index was preceded by the excitement in the stock market, when many tried to invest, even without real money, through loans, and the value of securities grew. The depression period lasted almost three years: on the wave of social discontent, the political agenda sharply shifted to the left, and Theodore Roosevelt came to power, proposing a "New Deal" for the economy. The index was able to return to pre-crisis values ​​only in 1954. on the wave of social discontent, the political agenda sharply shifted to the left, and Theodore Roosevelt came to power, proposing the "New Deal" of the economy. The index was able to return to pre-crisis values ​​only in 1954. on the wave of social discontent, the political agenda sharply shifted to the left, and Theodore Roosevelt came to power, proposing the "New Deal" of the economy. The index was able to return to pre-crisis values ​​only in 1954.

Banking Panic of 1907

Another famous stock market crash occurred in 1907 and led to the formation of the US Federal Reserve System.

It began in the 1900s with one of the largest trusts in America, the Knickerbocker Trust. Company President Charles Barney used bank funds to force the market to raise copper prices, but failed. Investors demanded their money back. With the collapse of this large organization, the banking panic began - a massive exodus of depositors from trust companies and banks, which led to a strong collapse of the Dow Jones Industrial Average - from January 1906 to November 1907, it fell by 48%.

In order to avoid the occurrence of similar cases in the future, the FRS was created in 1913.

Dotcom bubble

In the late 90s, the demand for shares of Internet companies skyrocketed. Some analysts and investors believed that the era of e-commerce had arrived, with many new firms targeting online businesses emerging.

On March 10, 2000, the Nasdaq index reached a peak - 5132.52 points - and by the close of trading fell one and a half times. Many American Internet companies (mostly dot-coms originated in the United States) have collapsed, since they lived on loans, and money was mainly spent on advertising and were unable to really monetize the business. Money-making IT giants like Amazon and Facebook came along later.

2008 mortgage crisis

One of the recent global economic crises stemmed from the US mortgage crisis. The American housing market collapsed in 2008 because banks made large loans easily and the share of high-risk loans rose. Mortgage-backed securities were in high demand among investors. As a result, a "mortgage bubble" was formed, which burst amid massive non-payments on mortgages and resulted in a large-scale wave of bankruptcies of banks, investment and insurance companies. Later, the crisis spread to the real economy.

"Black Monday" 1987

October 19, 1987 was one of the largest falls in the American Dow Jones stock index.

In just a day, the Dow Jones and S&P collapsed by 22.6% and 20%, respectively, and with them the global stock markets.

Experts are still arguing about the reasons for such a sharp drop. Among the hypotheses are the actions of trading robots that automatically follow the sell trend. The second option is the actions of large players who decided to close positions. Be that as it may, the situation did not have disastrous consequences for the economy.

Stock Market Crash 2020

Earlier this year, stock exchanges panicked amid news of a deadly new coronavirus and the onset of a pandemic.

From February 20 to March 23, all world markets fell, and the Dow Jones fell over the month from an all-time high of 29569 to 18214 points. The period from 24 to 28 February saw the largest one-week drop since the 2007-2008 crisis in world stock markets. The entire year of 2020 is marked by the coronavirus: after the collapse of the markets, a rapid recovery followed. In autumn, the markets were covered by the second wave of decline. Ahead are new anti-epidemic restrictions in various countries and the risks associated with the US elections.