A Brief History of Stock Market Crashes

Stock market crashes are a reality that commonly repeats itself throughout history. A stock market crash is something that happens suddenly resulting from a large drop over a significant cross-section of the stock market. Usually panic and disarray as well as other economic aspects are what cause stock markets to crash. Here is a brief look at some of the worst stock market crashes ever.

The Wall Street Crash of 1929 happened just as the stock market had reached its all time peak. The summer of that year showed that the stock market had peaked and a few price declines led to a wide panic that caused this sharp stock crash. The crash happened on October 24, 1929 (Black Thursday) and October 29, 1929 (Black Tuesday).

The Dow Jones dropped almost 13% on Black Tuesday. This news put everyone in a panic and people began selling off their stocks left and right. The ticker tape system that was used to tell investors the price of their stocks was down because of the overwhelming number of sales that were going through.

And to top it all off, the phone lines were unusable because so many people trying to use them at the same time and this only lead to more disarray and more panic which caused the stocks to drop even more. When it was all said and done, the Dow dropped 23%.

Another amongst the worst stock market crashes of all time happened in 2008 due to significant angst and worry about subprime loans and the credit default swaps that were used to insure these sub primes. This led to a rapid decline and another significant crash of the market that is affecting many people today.