The origin of the financial crisis and the Black Thursday 24th October 1929

On Thursday 24 October 1929 saw the crack, the explosion, the stock market in New Yor after leaving 13 million shares for sale and not find a buyer, the mismatch between supply and demand causes the value of these shares plummet. 

On October 29 and were more than 16 million of securities trading at the low encuentraron no buyer and caused the ruin of thousands of investors, many had purchased these securities with credits that after the explosion and could not afford. 


Many people ran scared banks to withdraw all their money and thus be affected as little as possible. 


The banks were overwhelmed by bad debts, credits and stood no more debt finance. In 1920 some 600 banks failed in 1930 and did about 1,345 just a year later 2298.

The business landscape was also upset because before the credits were obtained easily because enough money were available, but now everything had changed and get a credit was almost impossible given the lack of money.


This caused many companies go bankrupt and unemployment began to rise in a fairly high.

The Wall Street Journal on line, “Year end review”, 2008, http://online.wsj.com/public/page/quarterly-markets-review-010209.html. accesado 4 diciembre de 2008)