Todays recession vs the great depression?
You can talk about a major problem in each one which was credit. In the 1930s it all started because you only had to put 10% of the stock value down on a stock. So if you had $1,000 (which was a lot of money back then) and wanted to buy a stock at $10 a share you could buy 1,000 shares instead of 100. This meant that if the stock was to go from 10 to 15 the value of the stock would be $15,000 and all you would have to do was to pay back the 9,000 you borrowed and you would get $6,000 for a $5,000 profit. This would be a 500% profit when the stock only went up 50%. However, when stocks go down (which they did) the opposite is true. So if this $10 stock goes to $9 that would mean that the entire amount that was put up was gone. The investor was broke and the bank would call them up and say that if you wanted to keep the stock they would need more money. Now, obviously not many would have put more money up and the banks were forced to sell the stocks. This got out of hand and when these s
