ABEXIT - is it time for Alberta to think about leaving Canada?
- Thread starter B00Mer
- Start date
Black market items, that is why they created it.
the total is $2.2 trillion per year legal means are about $15T
https://www.thebalance.com/black-economy-4173517
The black economy is a commercial activity that operates outside of laws, regulations, and taxes. It's also called the shadow economy, the underground economy, or the informal economy.
Three Characteristics
There are three characteristics that describe the black economy. First, some aspect of it is illegal. It may provide goods or services that are prohibited by law. It could provide legal goods or services that avoid taxes. Or it could do both.
Second, cash is preferred. That way, payments avoid detection by law enforcement, bank compliance officers, or tax authorities. In 2018, an Australian study found that $72 billion of illegal activities used Bitcoin.
Third, it uses money laundering to convert payments to a legitimate form. Money laundering has three steps:
- Deposit funds into a financial system. They don't attract federal attention for cash deposits less than $10,000. For larger sums, they comingle the illegal gains with funds from a cash-heavy legal business.
- The layering of transactions to disguise the source, ownership, and location of the funds. They may create overseas shell companies that are only used to launder the cash.
- Integrate the funds into society in the form of holdings that appear legitimate. Many use funds to buy real estate.
Motivation
Sellers want to engage in the black economy to make more money than they could legally. They may also do it to gain prestige, power, and self-esteem. Most are in an environment where it is socially acceptable, if not encouraged, by their peers. Some others have been socially conditioned to believe this is the only way they can get ahead.
Buyers have three motivations. For many, the shadow economy is the only way to obtain an illegal good or service.
Others want to obtain a legal good or service at a lower price or faster delivery. For example, the cost of stolen or smuggled goods is lower than the cost of manufacturing the good. There are no taxes paid. You just pay for transportation, plus a fee to cover the seller's risk. Often they are sold on the street corner.
Some want to obtain a legal good or service that's in short supply. In these instances, the good or service will cost more in the black market, but it's more readily available.
Examples
Illegal services include illegal gambling, human trafficking, and prostitution. In 2016, trafficking affected 40 million people. Ten million are children. That includes 15.4 million in forced marriage and 24.9 million in forced labor. Of those, 16 million are forced into factory or farm labor and domestic servitude. Another 5 million are sexually exploited, and 4 million are in forced labor to the state. Women and girls comprise 99 percent of those enslaved in the sex industry. They are 58 percent of the other sectors.
The book "Human Trafficking, Human Misery" explains that trafficking also includes human organs, child soldiers, mail-order brides, and adoption. The United Nations Office on Drugs and Crime also includes forced begging.
In 2012, forced labor generated $150 billion in profits. Two-thirds are from sexual exploitation. Sex traffickers make $21,800 in profits each year from each of their victims. The CIA estimated that a trafficker in the sex trade earns up to $250,000 per victim each year.
A growing illegal service is the digital black economy and cybercrime. Examples include stolen personal and financial information. It's used to gain access to bank accounts and credit cards or to establish new lines of credit. Cybercriminals are highly skilled, under the age of 25, and often recruited from universities. Europol estimates it costs corporations 750 billion euros a year.
Illegal goods include street drugs, weapons, human organs, endangered species, and counterfeit money. Other examples include pirated movies and CDs, ticket scalping, and many goods sold on the street.
Global Financial Integrity estimated the maximum that illegal international trade made in the top 10 sectors.
- Counterfeiting: $1.13 trillion.
- Drug Trafficking: $652 billion.
- Illegal Logging: $157 billion.
- Illegal Mining: $48 billion.
- Illegal Fishing: $36.4 billion.
- Illegal Wildlife Trade: $23 billion.
- Crude Oil Theft: $11.9 billion.
- Light Weapons Trafficking: $3.5 billion.
- Organ Trafficking: $1.7 billion.
- Trafficking in Cultural Property: $1.6 billion.
When added to human trafficking, the total is $2.2 trillion.
A third example of the black economy is legal goods and services that are shielded from taxes. It includes any work done "under the table." It includes any income that isn't reported to tax authorities. For example, a construction worker engages in the black economy if he takes a cash payment and doesn't report it on his taxes. The work is legal, but his tax avoidance isn't.
The Internal Revenue Service estimates that 18.3 percent of taxes owed are not paid. As a result, tax evasion cost the federal government $458 billion per year from 2008 through 2010. The Internal Revenue Service recovers $52 billion, reducing the tax gap of $406 billion annually. The service also estimates the voluntary compliance rate, which is a measurement of the total taxes paid relative to total taxes owed.
Havoscope, a research company, estimates the global black market at $1.8 trillion. It has 50 categories, including prescription drug abuse, CD and DVD piracy, and illegal waste dumping. It does not include trafficking in cultural property.
It also breaks down the total by country. The United States is the largest, at $626 billion. China is next, at $261 billion. They are followed by Mexico at $126 billion, Spain at $124 billion, Italy at $111 billion, and Japan at $108 billion. The remaining top 10 countries have less than $100 billion each: Canada, India, United Kingdom, and Russia.
Advantages
The shadow economy provides jobs and income to people who might not have good options in the legitimate economy. For example, a street market allows dozens of entrepreneurs selling similar products to compete. In 2009, the Organization for Economic Cooperation and Development estimated that the shadow economy employed 1.8 billion people.
It allows people to afford medicine, health services, and other essential products they could never obtain otherwise. For example, a doctor in a country illegally can provide low-cost health care on a cash basis because he doesn't pay taxes.
Disadvantages
There are five negative impacts on society from a shadow economy.
First, are the losses to legitimate industries who can't compete with the lower costs of illegal operations.
In some instances, black market players deliberately create shortages in legal goods to force people to purchase from them.
Since the black market activities aren't taxed, the government loses revenue. These funds could have been used to provide services to the country's citizens.
Workers don't receive benefits or legal protection. As a result, many are exploited.
The underground market economic activity is not counted in government statistics. As a result, the country underestimates its gross domestic product. The International Monetary Fund estimates that the shadow economy would add between 14 to 16 percent to U.S. GDP. In emerging market countries, the percentage is between 35 to 44 percent.
It also miscounts employment. People working in the black economy aren't looking for a legitimate job. When surveyed, they probably respond that they are discouraged from looking. They aren't counted in the labor force.
For example, increased drug use is one reason why the labor force participation rate has declined since 1999. Yale professor Alan Krueger did a study of prime-aged men who weren't in the labor force. Professor Krueger found that 20 percent of the LFPR decline for these men was caused by increased use of opioid medication between 1999 and 2015. Almost half of them take pain medication daily to treat chronic health conditions. One third were forced to take illegal heroin when their prescriptions ran out and they became addicted.
Another study found that 1 million people are heavy users of opioid drugs. That's 0.5 percent of the labor force. It cost the economy $44 billion a year and slowed economic growth by 0.2 percent.
The legal ways still rob people as much as they can.
https://www.investmentwatchblog.com/5-companies-own-80-of-all-stock-in-sp-500-listed-companies/
5 Companies own 80% of all stock in S&P 500 listed companies
Monopolies: The Death Knell Of Capitalism – it’s described here
source
for those that don’t get how this makes sense:
The more stocks you own, the more can be measured and added onto a percentage in comparison to the markets 100% value of potentially owning.
In this case, 5 companies control 80% of the market.
Easy
Monopoly: ‘the death-knell of capitalism’
Tepper and Hearn have a thesis. Capitalism is defined by competition. The modern US economy, however, is dominated by monopolies. Therefore, US Americans live under ‘fake’ capitalism, a ‘grotesque deformed version of capitalism’ which is ‘as far away from the real thing as Disney’s Pirates of the Caribbean are from real pirates’ (p.xv). Tepper and Hearn have clearly identified one of the central issues in understanding modern capitalism: monopoly. In doing so, they have collected a wealth of useful material. Socialists should read this book, which is written in a very readable and enjoyable style, and use the information in it, but reject the reactionary politics that underlie it.
The book starts by analysing the extent of concentration in many US industries. Compiling evidence from various sources, the authors discover that four corporations control 90% of American beer; four airlines completely dominate airline traffic, often enjoying complete local monopolies in their regional ‘hubs’; five banks control half of US banking assets; in many states, the top two insurance companies have 80-90% market share between them; 75% of US households can only access one monopoly provider for high-speed internet; four companies control the entire US beef market and have ‘divided up the country’; three companies control both 70% of the global pesticide market and 80% of the US corn-seed market; Google’s share of internet search traffic is 90%; and so on.
As smaller competitors have been swallowed up by monopolies, over half of public firms have disappeared over the last 20 years: ‘On this trend, by 2070 we will only have one company per industry.’ ‘The scale of mergers is so extreme,’ Tepper and Hearn write, ‘that you would almost think American capitalists were trying to prove Karl Marx right’ (p.9).
Crucially, they say, monopoly leads to the active stifling of innovation: there is little incentive to spend money on research and development in order to innovate and out-compete non-existent rivals. It is much more efficient to simply raise prices; and the more concentrated the industry, the higher the price rises. The connection between low investment and monopoly ‘should be obvious’: ‘Today firms find it is more profitable to restrict production and dampen supply than it is to invest in expanding their capacity. Think of airlines who don’t want more capacity, beer companies that don’t expand plants, cable companies that don’t upgrade infrastructure, drug companies that don’t spend money on research and development, and so on’ .
Tepper and Hearn find monopoly lurking behind ‘higher profits for firms, higher prices for consumers, fewer startups, lower productivity, lower wages, and greater inequality’. They argue that monopoly explains the unprecedented $2trn sitting in offshore accounts and the rise of precarious working conditions. They demonstrate the central role played by monopoly finance capital in economic life: ‘the Big 5 institutional investors – Blackrock, Vanguard, State Street, Fidelity, and JP Morgan – now own 80% of all stock in S&P 500 listed companies’; and they argue that this situation is mirrored internationally. They give examples of monopolies dividing up the world market .
To explain how things have gone so wrong, the authors present a simplistic, but interesting, story of US history as ‘the long American fight against monopolies’ (p.138). They recount the Boston Tea Party revolt against trading monopoly, the story of the Robber Barons of the late nineteenth century and the largely ineffectual attempts to regulate and break up their monopolies. They recount the Nazi relationship with huge cartels like IG Farben, as well as the US corporation Standard Oil’s agreements with IG Farben to carve up the world market; and then tell us how the US reconstruction of post-war Germany had as its key aim the breaking up of the German cartels. They recount the growth of the Chicago school of economics during the Reagan era, and its influence on economic policy: Reagan-era attacks on anti-monopoly legislation led to one of the greatest waves of mergers and acquisitions in US history, which has continued decade after decade since.
Reform or revolution?
Recognising the growing anger of millions around the world against the terrible effects of the system of monopoly capitalism on their lives, this book is an appeal to capitalists and to bourgeois politicians to break up monopolies before the working class turns against that system. The authors argue that the rise of ‘populism’, under which heading they lump Occupy Wall Street, the Tea Party, and the votes for Jeremy Corbyn, Bernie Sanders, Donald Trump and Brexit, is explained by the ‘Newly Poor’, the immiserated middle classes who ‘feel the system is rigged against them and the future is not as bright as the past’. This is an astute observation in a period when imperialism is proving increasingly incapable of providing privileges to the middle classes. Terrified that the vacillating and ruined middle classes might throw their lot in with the working class in revolt, the living fear of the bourgeoisie and the motivation behind Tepper and Hearn’s attacks against monopoly are captured perfectly in the following quotation from their conclusion: ‘If we do not get reform, we will get a revolution that we have not chosen’ .
What is to be done?
Tepper and Hearn are scathing in their treatment of lobbyists and the revolving door between government and industry, arguing that the mono-polies have come to control the regulatory machinery: ‘It does not matter where you look, whether it is in pharmaceuticals, genetically modified crops, financial services, or telecommunications, the government has been captured by the companies it is meant to regulate’. Tepper and Hearn’s proposed solutions are spelled out in a shopping list of regulatory changes at the end of the book, including the breaking up of monopolies, the ‘granting’ of shares to workers and so on. Leaving aside the utopian idea that the very body which has been ‘captured’ by monopolies is to carry out such a program, Tepper and Hearn’s desire is to turn back the clock: ‘We have lost our way, but the past offers a path back’ to a time before monopoly.
In his critique of Pierre-Joseph Proudhon, The Poverty of Philosophy, Marx called those who wish to keep present-day economic and material development, but turn back the clock to an earlier form of society, ‘both reactionary and utopian.’ Just as nineteenth-century ‘society with the steam-mill’ could not return to a time of hand-mills and feudal lords, a 21st century society of vast monopoly capital, just-in-time planning techniques and robotised assembly lines cannot be legislated to return to a society of telegrams and economic competition. What Tepper and Hearn refuse to understand, despite having written a book on the subject, is that monopoly necessarily develops out of competition, as the larger capitals in their drive to accumulate out-compete and swallow up their smaller rivals. Marx recognised that this tendency signals the death-knell of capitalism: ‘although [the curbs on free competition] appear to complete the mastery of capital, [they] are at the same time, by curbing free competition the heralds of its dissolution, and of the dissolution of the means of production which are based on it’.
https://www.investmentwatchblog.com/who-are-the-worlds-richest-people/
Who are the world’s richest people?
Most people never realize how rich the Rothschild family is. Modern sources tracking wealth always exclude the Rothschilds from the richest lists.
https://www.investmentwatchblog.com/5-companies-own-80-of-all-stock-in-sp-500-listed-companies/
5 Companies own 80% of all stock in S&P 500 listed companies
Monopolies: The Death Knell Of Capitalism – it’s described here
They demonstrate the central role played by monopoly finance capital in economic life: ‘the Big 5 institutional investors – Blackrock, Vanguard, State Street, Fidelity, and JP Morgan – now own 80% of all stock in S&P 500 listed companies’; and they argue that this situation is mirrored internationally. They give examples of monopolies dividing up the world market .
The source can be found within the article
source
for those that don’t get how this makes sense:
How many stocks you have in the market can be compared to a percentage out of a 100 on the market.The more stocks you own, the more can be measured and added onto a percentage in comparison to the markets 100% value of potentially owning.
In this case, 5 companies control 80% of the market.
Easy
Monopoly: ‘the death-knell of capitalism’
Tepper and Hearn have a thesis. Capitalism is defined by competition. The modern US economy, however, is dominated by monopolies. Therefore, US Americans live under ‘fake’ capitalism, a ‘grotesque deformed version of capitalism’ which is ‘as far away from the real thing as Disney’s Pirates of the Caribbean are from real pirates’ (p.xv). Tepper and Hearn have clearly identified one of the central issues in understanding modern capitalism: monopoly. In doing so, they have collected a wealth of useful material. Socialists should read this book, which is written in a very readable and enjoyable style, and use the information in it, but reject the reactionary politics that underlie it.
The book starts by analysing the extent of concentration in many US industries. Compiling evidence from various sources, the authors discover that four corporations control 90% of American beer; four airlines completely dominate airline traffic, often enjoying complete local monopolies in their regional ‘hubs’; five banks control half of US banking assets; in many states, the top two insurance companies have 80-90% market share between them; 75% of US households can only access one monopoly provider for high-speed internet; four companies control the entire US beef market and have ‘divided up the country’; three companies control both 70% of the global pesticide market and 80% of the US corn-seed market; Google’s share of internet search traffic is 90%; and so on.
As smaller competitors have been swallowed up by monopolies, over half of public firms have disappeared over the last 20 years: ‘On this trend, by 2070 we will only have one company per industry.’ ‘The scale of mergers is so extreme,’ Tepper and Hearn write, ‘that you would almost think American capitalists were trying to prove Karl Marx right’ (p.9).
Crucially, they say, monopoly leads to the active stifling of innovation: there is little incentive to spend money on research and development in order to innovate and out-compete non-existent rivals. It is much more efficient to simply raise prices; and the more concentrated the industry, the higher the price rises. The connection between low investment and monopoly ‘should be obvious’: ‘Today firms find it is more profitable to restrict production and dampen supply than it is to invest in expanding their capacity. Think of airlines who don’t want more capacity, beer companies that don’t expand plants, cable companies that don’t upgrade infrastructure, drug companies that don’t spend money on research and development, and so on’ .
Tepper and Hearn find monopoly lurking behind ‘higher profits for firms, higher prices for consumers, fewer startups, lower productivity, lower wages, and greater inequality’. They argue that monopoly explains the unprecedented $2trn sitting in offshore accounts and the rise of precarious working conditions. They demonstrate the central role played by monopoly finance capital in economic life: ‘the Big 5 institutional investors – Blackrock, Vanguard, State Street, Fidelity, and JP Morgan – now own 80% of all stock in S&P 500 listed companies’; and they argue that this situation is mirrored internationally. They give examples of monopolies dividing up the world market .
They inform us that business schools in US universities teach their students to eliminate rivals, and that if they find themselves in possession of a small competitor they should sell it to the monopoly interest rather than try and fail to compete. The practices of monopoly, we are informed, are now the fundamentals of mainstream business education in the US.To explain how things have gone so wrong, the authors present a simplistic, but interesting, story of US history as ‘the long American fight against monopolies’ (p.138). They recount the Boston Tea Party revolt against trading monopoly, the story of the Robber Barons of the late nineteenth century and the largely ineffectual attempts to regulate and break up their monopolies. They recount the Nazi relationship with huge cartels like IG Farben, as well as the US corporation Standard Oil’s agreements with IG Farben to carve up the world market; and then tell us how the US reconstruction of post-war Germany had as its key aim the breaking up of the German cartels. They recount the growth of the Chicago school of economics during the Reagan era, and its influence on economic policy: Reagan-era attacks on anti-monopoly legislation led to one of the greatest waves of mergers and acquisitions in US history, which has continued decade after decade since.
Reform or revolution?
Recognising the growing anger of millions around the world against the terrible effects of the system of monopoly capitalism on their lives, this book is an appeal to capitalists and to bourgeois politicians to break up monopolies before the working class turns against that system. The authors argue that the rise of ‘populism’, under which heading they lump Occupy Wall Street, the Tea Party, and the votes for Jeremy Corbyn, Bernie Sanders, Donald Trump and Brexit, is explained by the ‘Newly Poor’, the immiserated middle classes who ‘feel the system is rigged against them and the future is not as bright as the past’. This is an astute observation in a period when imperialism is proving increasingly incapable of providing privileges to the middle classes. Terrified that the vacillating and ruined middle classes might throw their lot in with the working class in revolt, the living fear of the bourgeoisie and the motivation behind Tepper and Hearn’s attacks against monopoly are captured perfectly in the following quotation from their conclusion: ‘If we do not get reform, we will get a revolution that we have not chosen’ .
What is to be done?
Tepper and Hearn are scathing in their treatment of lobbyists and the revolving door between government and industry, arguing that the mono-polies have come to control the regulatory machinery: ‘It does not matter where you look, whether it is in pharmaceuticals, genetically modified crops, financial services, or telecommunications, the government has been captured by the companies it is meant to regulate’. Tepper and Hearn’s proposed solutions are spelled out in a shopping list of regulatory changes at the end of the book, including the breaking up of monopolies, the ‘granting’ of shares to workers and so on. Leaving aside the utopian idea that the very body which has been ‘captured’ by monopolies is to carry out such a program, Tepper and Hearn’s desire is to turn back the clock: ‘We have lost our way, but the past offers a path back’ to a time before monopoly.
In his critique of Pierre-Joseph Proudhon, The Poverty of Philosophy, Marx called those who wish to keep present-day economic and material development, but turn back the clock to an earlier form of society, ‘both reactionary and utopian.’ Just as nineteenth-century ‘society with the steam-mill’ could not return to a time of hand-mills and feudal lords, a 21st century society of vast monopoly capital, just-in-time planning techniques and robotised assembly lines cannot be legislated to return to a society of telegrams and economic competition. What Tepper and Hearn refuse to understand, despite having written a book on the subject, is that monopoly necessarily develops out of competition, as the larger capitals in their drive to accumulate out-compete and swallow up their smaller rivals. Marx recognised that this tendency signals the death-knell of capitalism: ‘although [the curbs on free competition] appear to complete the mastery of capital, [they] are at the same time, by curbing free competition the heralds of its dissolution, and of the dissolution of the means of production which are based on it’.
Over a century ago, Lenin wrote that ‘Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.’ The evidence in this book, in spite of the authors’ intentions, confirms Lenin’s analysis. Capital, in its monopoly form, is no longer developing and revolutionising the productive capacity of humanity through competitive innovation: it has become a fetter. The solution is not to look to the past, but to the future; and to do away once and for all with the parasitic and decaying capitalist system which has become a fetter on human development.https://www.investmentwatchblog.com/who-are-the-worlds-richest-people/
Who are the world’s richest people?
Most people never realize how rich the Rothschild family is. Modern sources tracking wealth always exclude the Rothschilds from the richest lists.
A slice of the 20% that was left.
How much of that could be debated, maybe 1% as there are still some very rich people that are not part of the 'inner circle'. Trump would be an 'outsider'.
That is what they do with minions. That would include all the business 'owners' in England that lost it all in 1815 and North America did the same in 1930. You would have lose everything and committed suicide'
https://www.thebalance.com/stock-market-crash-of-1929-causes-effects-and-facts-3305891
Stock Market Crash of 1929 Facts, Causes, and Impact
The Worst Crash in U.S. History
The stock market crash of 1929 was a four-day collapse of stock prices that began on October 24, 1929. It was the worst decline in U.S. history. The Dow Jones Industrial Average dropped 25 percent. It lost $30 billion in market value.
The 1929 stock market crash lost the equivalent of $396 billion today.
It was more than the total cost of World War I. It destroyed confidence in Wall Street markets and led to the Great Depression.
When did the Great Depression start? Many people think it started with the October 24 crash. But it really began months earlier, when the market fell 10 percent in a March correction.
What Happened
The first day of the crash was Black Thursday. The Dow opened at 305.85. It immediately fell 11 percent, signaling a stock market correction. Trading was triple the normal volume. Wall Street bankers feverishly bought shares to prop it up. The strategy worked. By the end of the day, the Dow was down just 2 percent.
On Friday, October 25, the positive momentum continued. The Dow rose 1 percent to 301.22. A short trading day on Saturday removed that gain. The Dow closed at 298.97, according to MeasuringWorth.com.
On Black Monday, October 28, the Dow fell 13 percent to 260.64.
The next day was Black Tuesday. The Dow fell 12 percent to 230.07. Panicked investors sold 16,410,310 shares.
Causes
The week of the stock market crash began with another down day. On Tuesday, The New York Times headlines fanned the panic with articles about margin sellers, short-selling, and the exit of foreign investors.
The Dow was already down 20 percent from its September 3 high, according to Yahoo Finance DJIA Historical Prices. That signaled a bear market. In late September, investors had been worried about massive declines in the British stock market. Investors in Clarence Hatry's company lost billions when they discovered he used fraudulent collateral to buy United Steel. A few days later, Great Britain's Chancellor of the Exchequer, Philip Snowden, described America's stock market as "a perfect orgy of speculation." The next day, U.S. newspapers agreed.
They quoted U.S. Treasury Secretary Andrew Mellon, who said investors "acted as if the price of securities would infinitely advance."
In response, the Dow dropped significantly on both of those days and again on October 16. By the 19th and 20th, The Washington Post reported a drop in ultra-safe utility stocks.
The day before Black Thursday, The Washington Post headlines blared "Huge Selling Wave Creates Near-Panic as Stocks Collapse," while The Times screamed "Prices of Stocks Crash in Heavy Liquidation." By Black Thursday, panic had set in for the worst stock market crash in history.
The crash followed an asset bubble. Since 1922, the stock market had gone up by almost 20 percent a year. Everyone invested, thanks to a financial invention called buying "on margin." It allowed people to borrow money from their broker to buy stocks. They only needed to put down 10-20 percent. Investing this way contributed to the irrational exuberance of the Roaring Twenties.
Effects
The crash wiped people out. There were forced to sell businesses and cash in their life savings. Brokers called in their loans when the stock market started falling. People scrambled to find enough money to pay for their margins. They lost faith in Wall Street.
You can’t have a healthy economy without confidence in the market.
By July 8, 1932, the Dow was down to 41.22. That was a 90 percent loss from its record-high close of 381.2 on September 3, 1929. It was the worst bear market in terms of percentage loss in modern U.S. history. The largest one-day percentage gain also occurred during that time. On March 15, 1933, the Dow rose 15.34 percent, a gain of 8.26 points, to close at 62.10.
The timeline of the Great Depression tracks critical events leading up to the greatest economic crisis the United States ever had.
The Depression devastated the U.S. economy. Wages fell 42 percent as unemployment rose to 25 percent. U.S. economic growth decreased 50 percent and world trade plummeted 65 percent. As a result of deflation, prices fell 10 percent a year between 1929 and 1933.
Below you can see a chart tracking key events leading up to the 1929 stock market crash.
Key Events Leading to the Stock Market Crash of 1929
https://www.thebalance.com/stock-market-crash-of-1929-causes-effects-and-facts-3305891
Stock Market Crash of 1929 Facts, Causes, and Impact
The Worst Crash in U.S. History
The stock market crash of 1929 was a four-day collapse of stock prices that began on October 24, 1929. It was the worst decline in U.S. history. The Dow Jones Industrial Average dropped 25 percent. It lost $30 billion in market value.
The 1929 stock market crash lost the equivalent of $396 billion today.
It was more than the total cost of World War I. It destroyed confidence in Wall Street markets and led to the Great Depression.
When did the Great Depression start? Many people think it started with the October 24 crash. But it really began months earlier, when the market fell 10 percent in a March correction.
What Happened
The first day of the crash was Black Thursday. The Dow opened at 305.85. It immediately fell 11 percent, signaling a stock market correction. Trading was triple the normal volume. Wall Street bankers feverishly bought shares to prop it up. The strategy worked. By the end of the day, the Dow was down just 2 percent.
On Friday, October 25, the positive momentum continued. The Dow rose 1 percent to 301.22. A short trading day on Saturday removed that gain. The Dow closed at 298.97, according to MeasuringWorth.com.
On Black Monday, October 28, the Dow fell 13 percent to 260.64.
The next day was Black Tuesday. The Dow fell 12 percent to 230.07. Panicked investors sold 16,410,310 shares.
Causes
The week of the stock market crash began with another down day. On Tuesday, The New York Times headlines fanned the panic with articles about margin sellers, short-selling, and the exit of foreign investors.
The Dow was already down 20 percent from its September 3 high, according to Yahoo Finance DJIA Historical Prices. That signaled a bear market. In late September, investors had been worried about massive declines in the British stock market. Investors in Clarence Hatry's company lost billions when they discovered he used fraudulent collateral to buy United Steel. A few days later, Great Britain's Chancellor of the Exchequer, Philip Snowden, described America's stock market as "a perfect orgy of speculation." The next day, U.S. newspapers agreed.
They quoted U.S. Treasury Secretary Andrew Mellon, who said investors "acted as if the price of securities would infinitely advance."
In response, the Dow dropped significantly on both of those days and again on October 16. By the 19th and 20th, The Washington Post reported a drop in ultra-safe utility stocks.
The day before Black Thursday, The Washington Post headlines blared "Huge Selling Wave Creates Near-Panic as Stocks Collapse," while The Times screamed "Prices of Stocks Crash in Heavy Liquidation." By Black Thursday, panic had set in for the worst stock market crash in history.
The crash followed an asset bubble. Since 1922, the stock market had gone up by almost 20 percent a year. Everyone invested, thanks to a financial invention called buying "on margin." It allowed people to borrow money from their broker to buy stocks. They only needed to put down 10-20 percent. Investing this way contributed to the irrational exuberance of the Roaring Twenties.
Effects
The crash wiped people out. There were forced to sell businesses and cash in their life savings. Brokers called in their loans when the stock market started falling. People scrambled to find enough money to pay for their margins. They lost faith in Wall Street.
You can’t have a healthy economy without confidence in the market.
By July 8, 1932, the Dow was down to 41.22. That was a 90 percent loss from its record-high close of 381.2 on September 3, 1929. It was the worst bear market in terms of percentage loss in modern U.S. history. The largest one-day percentage gain also occurred during that time. On March 15, 1933, the Dow rose 15.34 percent, a gain of 8.26 points, to close at 62.10.
The timeline of the Great Depression tracks critical events leading up to the greatest economic crisis the United States ever had.
The Depression devastated the U.S. economy. Wages fell 42 percent as unemployment rose to 25 percent. U.S. economic growth decreased 50 percent and world trade plummeted 65 percent. As a result of deflation, prices fell 10 percent a year between 1929 and 1933.
Below you can see a chart tracking key events leading up to the 1929 stock market crash.
Key Events Leading to the Stock Market Crash of 1929
- March 1929: The Dow dropped, but bankers reassured investors.
- August 8: The Federal Reserve Bank of New York raised the discount rate to 6 percent.
- September 3: The Dow peaked at 381.17. That was a 27 percent increase over the prior year.
- September 26: The Bank of England also raised its rate to protect the gold standard.
- September 29, 1929: The Hatry Case threw British markets into panic.
- October 3: Great Britain's Chancellor of the Exchequer Phillip Snowden called the U.S. stock market a "speculative orgy."
- October 4: The Wall Street Journal and The New York Times agreed with Snowden.
- October 24: Black Thursday.
- October 28: Black Monday.
- October 29: Black Tuesday.
- 1933: President Roosevelt launched the Federal Deposit Insurance Corporation to insure bank deposits. After the crash, banks only had enough to honor 10 cents for every dollar. That's because they had used their depositors' savings, without their knowledge, to buy stocks.
- November 23, 1954: The Dow finally regained its September 3, 1929, high, closing at 383.
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The First Day of the Worst Stock Market Crash in U.S. History
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When Did the Great Depression Start?
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The Biggest Market Crashes and Corrections in History
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The Worst Day in Wall Street's History
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Dow Highest Closing Records
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Are We in a Bear Market Now?
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Will the Next Stock Market Crash Cause a Recession?
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Black Monday in 1987, 1929, and 2015
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Great Depression Timeline
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These 35 Photos Show the Economic Impact of the Great Depression
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Protect Yourself from the Next U.S. Economic Crisis
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The Secrets of Wall Street: How It Works, Its History, and Its Crashes
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How Black Friday Got Its Name
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The Economy in the 1920s and What Caused the Great Depression
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6 Reasons Why 50% of Americans Think Another Depression Is Likely
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When and Why Did the Stock Market Crash in 2008?
When and Why Did the Stock Market Crash in 2008?
Well, that's easy. A no account Naygra from Kenya moved into the White House and it all collapsed a couple of weeks later.
The Naygra did it.
No racism in your family as you have it all. . . . pig. It also explains why you are as un-informed as you are.
(From the link)
The stock market crash of 2008 occurred on September 29, 2008. The Dow Jones Industrial Average fell 777.68 points in intra-day trading. Until 2018, it was the largest point drop in history. It plummeted because Congress rejected the bank bailout bill. But the stresses that led to the crash had been building for a long time.
On October 9, 2007, the Dow hit its pre-recession high and closed at 14,164.43. By March 5, 2009, it had dropped more than 50 percent to 6,594.44. Although it wasn't the greatest percentage decline in history, it was vicious.
The stock market fell 90 percent during the Great Depression. But that took three years. The 2008 crash only took 18 months.
The chart below ranks the 10 biggest one-day losses in Dow Jones history. Today, the September 29 point drop is still the third biggest.
This timeline will give you a detailed play-by-play explaining how the 2008 stock market crash happened.
2007
The Dow opened the year at 12,459.54. It rose despite growing concerns about the subprime mortgage crisis. On November 17, 2006, the Commerce Department warned that October's new home permits were 28 percent lower than the year before. But economists didn't think the housing slowdown would affect the rest of the economy. In fact, they were relieved that the overheated real estate market appeared to be returning to normal.
But falling home prices triggered defaults on subprime mortgages.
By August 2007, the Federal Reserve recognized that banks didn’t have enough liquidity to function.
The Fed began adding liquidity by buying banks’ subprime mortgages. In October, economists warned about the widespread use of collateralized debt obligations and other derivatives. In late November, Treasury Secretary Hank Paulson launched a bank-funded Superfund to purchase toxic bank debt.
As the year drew to a close, the Bureau of Economic Analysis revised its growth estimate higher. It said that the nation’s gross domestic product had increased 0.5 percent in the third quarter. Its prior estimate said it had shrunk 0.5 percent. It seemed the U.S. economy could shrug off a housing downturn and banks’ liquidity constraints. The Dow ended the year just slightly off its October high, at 13,264.82.
2008
At the end of January, the BEA revised its fourth-quarter GDP growth estimate down. It said growth was only 0.6 percent. The economy lost 17,000 jobs, the first time since 2004. The Dow shrugged off the news and hovered between 12,000 and 13,000 until March.
On March 17, the Federal Reserve intervened to save the failing investment bank, Bear Stearns. The Dow dropped to an intra-day low of 11,650.44 but seemed to recover. In fact, many thought the Bear Stearns rescue would avoid a bear market. By May, the Dow rose above 13,000. It seemed the worst was over.
In July 2008, the crisis threatened government-sponsored agencies Fannie Mae and Freddie Mac. They required a government bailout. The Treasury Department guaranteed $25 billion of their loans and bought shares of Fannie's and Freddie's stock. The Federal Housing Authority guaranteed $300 billion in new loans. On July 15, the Dow fell to 10,962.54. It rebounded and remained above 11,000 for the rest of the summer.
September 2008
The month started with chilling news. On Monday, September 15, 2008, Lehman Brothers declared bankruptcy. The Dow dropped 504.48 points.
On Tuesday, September 16, the Fed announced it was bailing out insurance giant, American International Group Inc. It made an $85 billion "loan" in return for 79.9 percent equity, effectively taking ownership. AIG had run out of cash. It was scrambling to pay off credit default swaps it had issued against now-failing mortgage-backed securities.
On Wednesday, September 17, money market funds lost $144 billion. That's where most businesses park their overnight cash. Companies had panicked, switching to even safer Treasury notes. They did this because Libor rates were high. Banks had driven up rates because they were afraid to lend to each other. The Dow fell 449.36 points.
On Thursday, September 18, markets rebounded 400 points. Investors learned about a new bank bailout package.
On Friday, September 19, the Dow ended the week at 11,388.44. It was only slightly below its Monday open of 11,416.37. The Fed established the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. It loaned $122.8 billion to banks to buy commercial paper from money market funds. The Fed's announcement confirmed that credit markets were partially frozen and in panic mode.
On Saturday, September 20, Secretary Paulson and Federal Reserve Chair Ben Bernanke sent the bank bailout bill to Congress. The Dow bounced around 11,000 until September 29, when the Senate voted against the bailout bill. The Dow fell 777.68 points, the most in any single day in history. Global markets also panicked, as well:
October 2008
Congress finally passed the bailout bill in early October, but the damage had already been done. The Labor Department reported that the economy had lost a whopping 159,000 jobs in the prior month. On Monday, October 6, the Dow dropped 800 points, closing below 10,000 for the first time since 2004.
The Fed tried to prop up banks by lending $540 billion to money market funds. The funds needed the cash to meet a continuing barrage of redemptions. Since August, more than $500 billion had been withdrawn from money markets.
JPMorgan Chase managed the Fed's Money Market Investor Funding Facility. It purchased up to $600 billion of certificates of deposit, bank notes, and commercial paper that would come due in 90 days. The remaining $60 billion came from the money markets themselves. But they were also purchasing commercial paper from the MMIFF.
The Fed quickly lowered the fed funds rate to just 1 percent. But the Libor bank lending rate rose to its high of 3.46 percent. The Fed also coordinated a global central bank bailout.
The Dow responded by plummeting 13 percent throughout the month. By the end of October, the BEA released more sobering news. The economy had contracted 0.3 percent in the third quarter. The nation was in recession.
November 2008
The month began with more bad news. The Labor Department reported that the economy had lost a staggering 240,000 jobs in October. The AIG bailout grew to $150 billion. Treasury announced it was using part of the $700 billion bailouts to buy preferred stocks in the nations' banks. The Big Three automakers asked for a federal bailout. By November 20, 2008, the Dow had plummeted to 7,552.29, a new low. But the stock market crash of 2008 was not over yet.
December 2008
The Fed dropped the fed funds rate to zero, its lowest level in history. The Dow ended the year at a sickening 8,776.39, down almost 34 percent for the year.
2009
On January 2, 2009, the Dow climbed to 9,034.69. Investors believed the new Obama administration could tackle the recession with his team of economic advisers. But the bad economic news continued. On March 5, 2009, the Dow plummeted to its bottom of 6,594.44.
Soon afterward, Obama's economic stimulus plan instilled the confidence needed to stop the panic. On July 24, 2009, the Dow reached a higher high. It closed at 9,093.24, beating its January high. For most, the stock market crash of 2008 was over.
Aftermath
Investors bore the emotional scars from the crash for the next four years. On June 1, 2012, they panicked over a poor May jobs report and the eurozone debt crisis. The Dow dropped 275 points. The 10-year benchmark Treasury yield dropped to 1.443 during intraday trading. This was the lowest rate in more than 200 years. It signaled that the confidence that evaporated during 2008 had not quite returned to Wall Street.
In 2013, the stock market finally recovered. In the first six months, it gained more points than in any year on record. Stock prices rose faster than earnings, creating an asset bubble. The Dow set over 250 closing records until February 2018. Fears of inflation and higher interest rates almost sent the Dow into a correction. Like many other past stock market crashes, it did not lead to a recession.
(From the link)
The stock market crash of 2008 occurred on September 29, 2008. The Dow Jones Industrial Average fell 777.68 points in intra-day trading. Until 2018, it was the largest point drop in history. It plummeted because Congress rejected the bank bailout bill. But the stresses that led to the crash had been building for a long time.
On October 9, 2007, the Dow hit its pre-recession high and closed at 14,164.43. By March 5, 2009, it had dropped more than 50 percent to 6,594.44. Although it wasn't the greatest percentage decline in history, it was vicious.
The stock market fell 90 percent during the Great Depression. But that took three years. The 2008 crash only took 18 months.
The chart below ranks the 10 biggest one-day losses in Dow Jones history. Today, the September 29 point drop is still the third biggest.
This timeline will give you a detailed play-by-play explaining how the 2008 stock market crash happened.
2007
The Dow opened the year at 12,459.54. It rose despite growing concerns about the subprime mortgage crisis. On November 17, 2006, the Commerce Department warned that October's new home permits were 28 percent lower than the year before. But economists didn't think the housing slowdown would affect the rest of the economy. In fact, they were relieved that the overheated real estate market appeared to be returning to normal.
But falling home prices triggered defaults on subprime mortgages.
By August 2007, the Federal Reserve recognized that banks didn’t have enough liquidity to function.
The Fed began adding liquidity by buying banks’ subprime mortgages. In October, economists warned about the widespread use of collateralized debt obligations and other derivatives. In late November, Treasury Secretary Hank Paulson launched a bank-funded Superfund to purchase toxic bank debt.
As the year drew to a close, the Bureau of Economic Analysis revised its growth estimate higher. It said that the nation’s gross domestic product had increased 0.5 percent in the third quarter. Its prior estimate said it had shrunk 0.5 percent. It seemed the U.S. economy could shrug off a housing downturn and banks’ liquidity constraints. The Dow ended the year just slightly off its October high, at 13,264.82.
2008
At the end of January, the BEA revised its fourth-quarter GDP growth estimate down. It said growth was only 0.6 percent. The economy lost 17,000 jobs, the first time since 2004. The Dow shrugged off the news and hovered between 12,000 and 13,000 until March.
On March 17, the Federal Reserve intervened to save the failing investment bank, Bear Stearns. The Dow dropped to an intra-day low of 11,650.44 but seemed to recover. In fact, many thought the Bear Stearns rescue would avoid a bear market. By May, the Dow rose above 13,000. It seemed the worst was over.
In July 2008, the crisis threatened government-sponsored agencies Fannie Mae and Freddie Mac. They required a government bailout. The Treasury Department guaranteed $25 billion of their loans and bought shares of Fannie's and Freddie's stock. The Federal Housing Authority guaranteed $300 billion in new loans. On July 15, the Dow fell to 10,962.54. It rebounded and remained above 11,000 for the rest of the summer.
September 2008
The month started with chilling news. On Monday, September 15, 2008, Lehman Brothers declared bankruptcy. The Dow dropped 504.48 points.
On Tuesday, September 16, the Fed announced it was bailing out insurance giant, American International Group Inc. It made an $85 billion "loan" in return for 79.9 percent equity, effectively taking ownership. AIG had run out of cash. It was scrambling to pay off credit default swaps it had issued against now-failing mortgage-backed securities.
On Wednesday, September 17, money market funds lost $144 billion. That's where most businesses park their overnight cash. Companies had panicked, switching to even safer Treasury notes. They did this because Libor rates were high. Banks had driven up rates because they were afraid to lend to each other. The Dow fell 449.36 points.
On Thursday, September 18, markets rebounded 400 points. Investors learned about a new bank bailout package.
On Friday, September 19, the Dow ended the week at 11,388.44. It was only slightly below its Monday open of 11,416.37. The Fed established the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. It loaned $122.8 billion to banks to buy commercial paper from money market funds. The Fed's announcement confirmed that credit markets were partially frozen and in panic mode.
On Saturday, September 20, Secretary Paulson and Federal Reserve Chair Ben Bernanke sent the bank bailout bill to Congress. The Dow bounced around 11,000 until September 29, when the Senate voted against the bailout bill. The Dow fell 777.68 points, the most in any single day in history. Global markets also panicked, as well:
- The MSCI World Index dropped 6 percent in one day, the most since its creation in 1970.
- Brazil's Ibovespa was halted after dropping 10 percent.
- The London FTSE dropped 15 percent.
- Gold soared to over $900 an ounce.
- Oil dropped to $95 a barrel.
October 2008
Congress finally passed the bailout bill in early October, but the damage had already been done. The Labor Department reported that the economy had lost a whopping 159,000 jobs in the prior month. On Monday, October 6, the Dow dropped 800 points, closing below 10,000 for the first time since 2004.
The Fed tried to prop up banks by lending $540 billion to money market funds. The funds needed the cash to meet a continuing barrage of redemptions. Since August, more than $500 billion had been withdrawn from money markets.
JPMorgan Chase managed the Fed's Money Market Investor Funding Facility. It purchased up to $600 billion of certificates of deposit, bank notes, and commercial paper that would come due in 90 days. The remaining $60 billion came from the money markets themselves. But they were also purchasing commercial paper from the MMIFF.
The Fed quickly lowered the fed funds rate to just 1 percent. But the Libor bank lending rate rose to its high of 3.46 percent. The Fed also coordinated a global central bank bailout.
The Dow responded by plummeting 13 percent throughout the month. By the end of October, the BEA released more sobering news. The economy had contracted 0.3 percent in the third quarter. The nation was in recession.
November 2008
The month began with more bad news. The Labor Department reported that the economy had lost a staggering 240,000 jobs in October. The AIG bailout grew to $150 billion. Treasury announced it was using part of the $700 billion bailouts to buy preferred stocks in the nations' banks. The Big Three automakers asked for a federal bailout. By November 20, 2008, the Dow had plummeted to 7,552.29, a new low. But the stock market crash of 2008 was not over yet.
December 2008
The Fed dropped the fed funds rate to zero, its lowest level in history. The Dow ended the year at a sickening 8,776.39, down almost 34 percent for the year.
2009
On January 2, 2009, the Dow climbed to 9,034.69. Investors believed the new Obama administration could tackle the recession with his team of economic advisers. But the bad economic news continued. On March 5, 2009, the Dow plummeted to its bottom of 6,594.44.
Soon afterward, Obama's economic stimulus plan instilled the confidence needed to stop the panic. On July 24, 2009, the Dow reached a higher high. It closed at 9,093.24, beating its January high. For most, the stock market crash of 2008 was over.
Aftermath
Investors bore the emotional scars from the crash for the next four years. On June 1, 2012, they panicked over a poor May jobs report and the eurozone debt crisis. The Dow dropped 275 points. The 10-year benchmark Treasury yield dropped to 1.443 during intraday trading. This was the lowest rate in more than 200 years. It signaled that the confidence that evaporated during 2008 had not quite returned to Wall Street.
In 2013, the stock market finally recovered. In the first six months, it gained more points than in any year on record. Stock prices rose faster than earnings, creating an asset bubble. The Dow set over 250 closing records until February 2018. Fears of inflation and higher interest rates almost sent the Dow into a correction. Like many other past stock market crashes, it did not lead to a recession.
Oh my.... Such commentary and just prior to a Fed election.
From the article:
"What happens if you campaign so vigorously against Justin Trudeau, and every seat in Alberta goes Conservative? And every seat in Saskatchewan goes Conservative, and the Liberals get re-elected?"
"What happens when you've raised that anger up so much?"
Answer: Stir the sentiment for a referendum on separation.
From the article:
"What happens if you campaign so vigorously against Justin Trudeau, and every seat in Alberta goes Conservative? And every seat in Saskatchewan goes Conservative, and the Liberals get re-elected?"
"What happens when you've raised that anger up so much?"
Answer: Stir the sentiment for a referendum on separation.
Poor confused MHz!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Are you sure your monitor is really BIG??????????????????????
Maybe its just that your head is REALLY SMALL??????????????????
Better have some more LSD !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
At least your mind will be expanded to be able to hold BIG ideas......................................
yes..............................
your mind will become like a German Zeppelin hanger.............................................
a half century after they became OBSOLETE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Yes.................................
The mind of MHz has become an ECHO CHAMBER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
can you here me?????????????????????????
can you hear me??????????????????
can you hear me??????????
can you hear me?????
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
It's an interesting twist to the election rhetoric hopefully it doesn't backfire in 'lil potato's favor
I thought Kenney's strategy made sense, but maybe it's better not to try doing anything to Trudeau, as it looks like he's already doing it to himself. When you try too hard to discredit someone, people sometimes get suspicious and question your motive. Let him do it to himself. We can all see his motives are selfish and his logic is wonky at best.