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Black Thursday: The Margin Mechanism That Broke American Capitalism
Audio is available on Spreaker — see link below.
Buying on margin turned the 1929 stock market into a self-destroying machine — and when it finally fired, it took ten thousand banks and a generation's wealth with it. This is the story of how a chain reaction hiding in plain sight became the Great Depression.
Audio is available on Spreaker — see link below.
Here's something most people get wrong about the nineteen twenty-nine crash. They think it happened in a single day.
To understand what broke, you need to understand what was built. Through most of the nineteen twenties, the American stock market was running hot.
By September of nineteen twenty-nine, the market had reached its peak. Then it began to slip.
A severe stock market crash didn't have to become the Great Depression. A crash wipes out paper wealth and punishes leveraged speculators, but economies have weathered crashes before and recovered.
The banking collapses came in waves. Three major crises between nineteen thirty and nineteen thirty-one.
Out of that collapse came the visible geography of failure. Shantytowns appeared on the edges of American cities, built from scrap lumber, cardboard, and salvaged metal.
Franklin Roosevelt took office in March of nineteen thirty-three. His answer was the New Deal, a collection of programs, agencies, and legislative acts that represented a permanent shift in what Americans expected from their federal government.
The stock market did not recover its nineteen twenty-nine peak until nineteen fifty-four. Twenty-five years.
October nineteen twenty-nine wasn't simply a moment of irrational panic. It was the failure point of a system that had been made fragile by leverage, unregulated speculation, and a central bank that responded to crisis by tightening rather than supporting.
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