Thread by @gautam_icma

The sequence of events which led to the 1929 crash in Wall Street. (Comments welcome)
1920—1928
For almost eight straight years stock market was rising and there was no upper limit. The dollar was king. This decade was also named as “Roaring Twenties”.

New products and technologies included Automobiles, radios, cinema, sound movies, washing machines and Air conditioners.

1929 (January- February)
There was a feeling of optimism in the air
“Never saw the sun shining so bright
Never saw things going so right”
The stock market was thriving. It was moving up in leaps and bounds.
Jesse Livermore a broker who thrived was a household name.

Roger Babson an eminent economist warned of crash. He was accused of lack of patriotism.
Margin trading was rampant and so were syndicates pushing up prices of select companies.
On 25th March 1929 came the first warning….. Margin traders were wiped out.

However Banks bailed out the investors next day by providing more margins.

The summer and spring of 1929
Steel production was declining, construction was sluggish, car sales dropped, and it was becoming increasingly difficult to find customers.

Because of easy credit many people were deeply in debt. A large section of the population was poor and getting poorer. The stock market ignored all. It soared to new high. The speculative boom had acquired a momentum of its own.

Film makers like Groucho Marx who had made films on Florida land boom and its bust (The Coconuts) where he ridiculed the investors, made money from their shows and invested in stock market and that too on margin.

The Famous song “I am in the market for you”.
August 1929… Broking firm opened its office on ships for passengers travelling to Europe.
Astrologer (who had 100000 subscribers to his newsletters on stocks) predicted stock market could rise till heaven.

On 5Th September 1929 Roger Babson Economist warned “Sooner or later a crash is coming and it may be terrific”. The market drifted lower. However every time brief rally was seen after any significant fall.

Thomas Lamont Head of highly conservative “Morgan Bank” wrote to President Hoover that US stock market is in fine state and is in demand worldwide.
Even the entrepreneurs assured that economy was fine and it had one way to go.

23rd Oct - Free fall in market. (Ironically USA was celebrating 50Th year of Thomas Alva Edison’s “Electric bulb” which had put USA in front seat of industrial power).
24th Oct- fall was halted as Banks intervened in major way.

28th Oct – The free fall continued. At the end of the day, all was lost, many committed suicide. Stock certificates were just piece of paper. Wealthy Americans, who sailed from London, landed in New York as pauper. Jesse Livermore committed suicide a few years later.

From 3rd September to 13th November 1929 the index halved from 386 to 195. It was beginning of “The Great Depression”.

Source : From various articles on internet and youtube videos.

A clarification: Jesse Livermore successfully waded through the bear market just like he did in the bull phase. However he was hounded by SEC which was becoming a powerful factor. He could not “play” the market as before. His interest in the market was gone.

Finally he committed suicide in 1940.
Readers of my tweet are assuming I said Jesse Livermore lost his fortune and committed suicide. The fault is mine. I should have been more elaborative.