Qu'est-ce que la crise de 1929 ?

Summary

The 1929 stock market crash in New York, triggered by the bursting of a speculative bubble, led to the Great Depression, a global economic downturn lasting nearly 25 years. The video explains the mechanisms of stock exchanges, the role of shares and bonds, and how the collapse affected investors, banks, and businesses. It also details the New Deal policies by President Roosevelt, which involved state intervention and public investment to stimulate the economy, eventually helping the US recover, though it took until 1954 for the New York Stock Exchange to regain its pre-crisis value.

Takeaways

• 📉 The 1929 crisis, also known as Black Tuesday, was a stock market crash in New York that marked the beginning of the Great Depression.
• 🌐 The Great Depression was a world economic crisis that lasted nearly 25 years, demonstrating the global impact of localized financial events.
• 💡 Stock market crises do not always lead to economic crises, but the 1929 crash was an exception due to the bursting of a speculative bubble.
• 🏛 The stock market crash was not directly linked to the COVID-19 crisis, which was an unprecedented event not associated with a speculative bubble.
• 📈 Other significant stock market crises occurred in 1987 and 2008, with the latter being connected to the collapse of a real estate speculative bubble.
• 💼 A share represents partial ownership in a company and allows investors to buy a portion of a company, with the potential for profit through dividends.
• 💵 A bond is a debt instrument issued by a company, offering investors fixed interest payments and a promise to repay the principal at maturity.
• 🏦 The stock exchange serves as an intermediary between companies seeking capital and investors looking to invest, playing a critical role in liberal economies.
• 💸 The economic system involves complex interactions between individuals, companies, banks, and governments, with money creation and circulation being key components.
• 🌐 American capital played a significant role in post-war Europe, with investments aiding in reconstruction efforts after significant wartime damage.
• 📉 The speculative bubble in 1929 was fueled by easy credit, leading to overvaluation and eventual collapse, which had devastating effects on the economy.

Q & A

What is the significance of the 1929 stock market crash?

The 1929 stock market crash, also known as Black Tuesday, marked the beginning of the Great Depression, a severe and prolonged world economic crisis that lasted nearly 25 years.

How does a stock market crash differ from an economic crisis?

A stock market crash is a sudden and sharp decline in stock prices, often affecting a single country. An economic crisis, however, is a broader and more prolonged downturn affecting the entire economy, including employment, production, and trade.

What is a speculative bubble and how does it relate to the 1929 crash?

A speculative bubble is a situation where asset prices rise far above their intrinsic value due to excessive speculation. The 1929 crash was a result of the bursting of such a bubble, where the inflated stock prices suddenly dropped, causing a market crash.

What is the role of a stock exchange in an economy?

A stock exchange serves as an intermediary between companies seeking capital and investors looking to invest. It facilitates the buying and selling of shares and bonds, and is a key tool in liberal economies for capital allocation and economic growth.

What is a share and how does it function in a company's financing?

A share represents a portion of ownership in a company. When a company issues shares, it allows investors to buy a stake in the company, providing the company with capital. Investors may earn dividends if the company performs well and can also benefit from the increase in share value.

How do bonds differ from shares as a form of investment?

Bonds are debt securities where the investor lends money to the company, which promises to pay back the principal along with interest. Shares, on the other hand, represent ownership in a company, and investors earn dividends and capital gains based on the company's performance.

What was the role of the 'call loan' system in the 1929 stock market crash?

The 'call loan' system allowed investors to buy stocks on margin, using borrowed money. This practice led to a speculative bubble and increased the vulnerability of the market. When the bubble burst, many investors were unable to meet their margin calls, leading to a massive sell-off and the stock market crash.

Why did the stock market crash in 1929 have such a far-reaching impact?

The 1929 stock market crash had a domino effect on the global economy. As the U.S. economy contracted, banks failed, and unemployment soared, the demand for goods and services dropped. This led to a ripple effect, causing economic downturns in other countries that were connected through trade and finance.

What measures did President Franklin D. Roosevelt implement to combat the Great Depression?

President Roosevelt introduced the New Deal, a series of programs and policies aimed at providing relief, recovery, and reform. This included public works projects to employ the jobless, financial reforms to stabilize the banking system, and social security measures to protect the vulnerable.

How did the Great Depression affect Europe, and what was the role of American capital in post-war reconstruction?

The Great Depression had a significant impact on Europe, exacerbating economic hardships and political instability. American capital played a crucial role in post-war Europe by providing the necessary funds for reconstruction, which helped to revive the European economy and stabilize the political landscape.

What is the significance of the term 'Black Tuesday' in the context of the 1929 stock market crash?

Black Tuesday refers to October 29, 1929, the day when the stock market crash reached its peak and stock prices plummeted. It symbolizes the worst day of the crash and is often used to represent the beginning of the Great Depression.

Outlines

00:00

📉 The 1929 Stock Market Crash and the Great Depression

The script discusses the 1929 stock market crash in New York, which initiated the Great Depression, a global economic crisis lasting nearly 25 years. It explains that not all stock market crashes lead to economic crises, but the 1929 crash did due to a speculative bubble. The script also covers the concept of stocks and bonds, and how they function in the stock market. It highlights the role of the stock exchange as an intermediary between companies and investors and how it facilitates transactions in liberal economies. The economic ripple effects of the crash are also mentioned, including how American capital was invested in Europe for post-war reconstruction, and how the crisis led to a halt in economic activities and a domino effect across the globe.

05:01

💸 The Aftermath of the 1929 Crash and the Economic Impact

This paragraph details the immediate aftermath of the 1929 stock market crash, including the panic selling by investors, the attempts by banks to stabilize the market, and the eventual collapse on 'Black Tuesday,' October 29, 1929. It describes how the crash led to widespread bank failures, company bankruptcies, and unemployment, which in turn paralyzed the economy. The script also touches on the initial European response to the crisis, which was to view it as an American problem. It outlines the economic interdependencies that led to the crisis spreading globally and discusses the New Deal policies introduced by President Roosevelt in 1932 to stimulate the economy through public investment and support for the unemployed. The long-term effects of the crisis are also highlighted, noting that it took until 1954 for the New York Stock Exchange to regain its pre-crash value.

Keywords

💡Stock Market Crash

A stock market crash is a sudden dramatic drop in stock prices across a broad range of a market. In the context of the video, the 1929 crisis refers to the stock market crash in New York that marked the beginning of the Great Depression. The crash is characterized by a rapid sell-off of shares, leading to a significant decline in market value, as exemplified by the panic selling on 'Black Tuesday,' October 29, 1929.

💡Great Depression

The Great Depression was a severe worldwide economic depression that lasted from 1929 to the late 1930s. It began in the United States after the stock market crash and gradually spread to other countries. The video emphasizes that while the stock market crash was a trigger, the Great Depression was a prolonged economic crisis that spanned nearly 25 years, affecting industries, employment, and financial systems globally.

💡Speculative Bubble

A speculative bubble refers to a situation in which asset prices rise rapidly and dramatically, far exceeding their intrinsic value, due to speculation and investor exuberance. The video explains that the 1929 stock market crash was born out of the bursting of a speculative bubble, where the imbalance in the market led to a sudden and sharp correction in stock prices.

💡Share

A share represents a unit of ownership in a company, which investors can buy to become part-owners. The video describes how companies issue shares to raise capital, and investors buy these shares to gain a portion of the company's profits through dividends. Shares are a central concept in the stock market dynamics discussed in the video.

💡Bond

A bond is a debt security, under which the issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (a coupon) and to repay the principal at a later date, termed the maturity of the bond. The video mentions bonds as a type of security that allows companies to raise money without giving up control, with investors earning interest annually.

💡Stock Exchange

A stock exchange is a marketplace where securities like shares and bonds are issued and traded. The video refers to the New York Stock Exchange as the place where the 1929 crash occurred, highlighting its role as an intermediary between companies and investors in a liberal economy.

💡Margin

Margin refers to the practice of borrowing money to purchase securities, with the securities serving as collateral for the loan. The video discusses how the use of margin, or the 'call loan' system, contributed to the speculative bubble and subsequent crash, as investors bought stocks with borrowed money, amplifying the market's volatility.

💡Economic Crisis

An economic crisis is a period of negative economic growth, typically characterized by high unemployment, low business activity, and reduced industrial production. The video explains that while not all stock market crashes lead to economic crises, the 1929 crash triggered a global economic crisis that lasted for decades, affecting various sectors and countries.

💡Bankruptcy

Bankruptcy is a legal process through which individuals or entities who are unable to repay their outstanding debts are relieved of the liability to do so and their assets are distributed. The video describes how the stock market crash led to the bankruptcy of banks and companies, as they were unable to recover the loans made during the speculative period.

💡Unemployment

Unemployment refers to the condition of being without a job while actively seeking work. The video connects the stock market crash to rising unemployment, as companies reduced production or went bankrupt, leading to job losses and a slowdown in economic activity.

💡New Deal

The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s in response to the Great Depression. The video discusses the New Deal as a set of policies aimed at providing relief, recovery, and reform to revitalize the economy and reduce unemployment.

Highlights

The 1929 crisis was a stock market crash in New York that led to the Great Depression, lasting nearly 25 years.

The crisis originated from the bursting of a speculative bubble, indicating an imbalance in the market.

Not all stock market crises result in economic crises, unlike the deliberate savings crisis of 2020.

Other significant stock market crises occurred in 1987 and 2008, with varying impacts.

The 2001 crisis, also known as the dot-com bubble, was linked to the collapse of an internet-related speculative bubble.

The subprime crisis in 2008 was linked to the bursting of a real estate speculative bubble in the United States.

A company may issue shares to raise capital without losing control, offering partial ownership to investors.

Investors who buy shares become part-owners of a company and may receive dividends if the company performs well.

Bonds are a type of debt security that allows companies to raise money and pay annual interest to investors.

A stock exchange facilitates transactions between companies and investors, acting as a key tool in liberal economies.

The economy involves complex interactions between individuals, companies, banks, and the creation of debt money.

In the 1920s, American capital was invested in Europe to aid in post-war reconstruction.

The American economy was booming in 1926, leading to the creation of a system that facilitated loans for stock market investments.

The speculative bubble formed in 1929, leading to the stock market crash on Black Tuesday, October 29.

The stock market crash led to a chain reaction of bankruptcies, unemployment, and a paralyzed economy.

Banks repatriated their capital, causing a ripple effect that led to the economic crisis spreading to Europe.

President Roosevelt's New Deal in 1932 involved state intervention and public investment to stimulate the economy.

The New Deal aimed to restart the economic circuit by financing infrastructure projects and aiding the unemployed.

It wasn't until November 1954 that the New York Stock Exchange reached values similar to pre-crisis levels.

Rearmament in the 1930s was another method of economic revival, funded by public money, despite its disastrous consequences.

Transcripts

[Music] the 1929 crisis designates a stock market crash a stock market crash

that occurred in october 1929 in new york this crisis which lasted less than a

week but the great depression a world economic crisis which lasted nearly 25 years to

have in mind crisis economic born of the bursting of a speculative bubble,

that is to say an imbalance which will be 1929 is a stock market crisis in the united states in new

york which becomes a world economic crisis by ripple effects which

sometimes take months to declaring all stock market crises does not necessarily become

economic crises there is one exception the art is deliberate of savings to deal with the

co vacuum 19 has generated an unprecedented crisis not linked to the bursting of a speculative bubble

there are other stock market crises in 87 in 2008 with less significant impacts in 2001 a

stock market crisis burst following the collapse of the speculative bubble linked to the internet it is called

the snag and economic crisis do not always have the stock market the origin of the subprime crisis in

2008, for example, is linked to the bursting of a real estate speculative bubble in the united states

what is mud there is first of all a company that needs money to

operate sometimes a person a family is not rich enough to be the sole

owner of these companies it then decides to break up into several

ownership shares they are called shares a share is a share of ownership of the company

these are therefore shares investors who are looking to invest their money they can buy shares

when he buys a share he buys part of the company the set of

investors is called the shareholding this share gives the right to a share of the profits

that we call the dividend if the company does good business the share will increase

in value but the reverse is also true a bond another stock market security allows

companies to have money without losing control a bond c t is therefore a

debt of the company which can also be purchased by investors at this

time with a bond an investor earns interest annually the place where

these transactions are carried out is called love [Applause] [Music] a stock exchange is

thus an intermediary between companies and investors it is a tool it is a

key tool liberal economies it is a facilitator which is little regulated

if we schematize the economy we find Mr. Madam Everybody with companies there there are

links a salary a job the companies produce materials pay salaries to

their employees with this money an employee can save to consume there are also loans

that can be made by the companies and the creation of debt money the money creation

is quite complex but banks create debt money which then goes

to savers for example to buy a house generates interest for companies for

their activities it can happen that a flourishing economy has too much capital in this case there

this economy places this capital outside the country and that is good because europe needs

capital to rebuild itself after the war and this is how american capital

will be placed in europe in the 1920s they will be useful for reconstruction

after miller the american economy is in great shape in a world which is badly affected by

the war in 1926 a system of loan facilitated to invest in the stock market is created

by the american banks which is called the clown the column forms a speculative bubble

in 1929 said for for sicotte they are a hundred fortunes and they invest in the

stock market with money they have borrowed for this thanks to the col

everything is ready during the summer of 1929 the new york stock exchange s' racing when

activities usually slow down with summer in September when

activities usually resume in 1929 they slow down these two unprecedented trends

are in fact the beginning of the bursting of the speculative bubble linked to the columns

first tremors on thursday october 24 in new york worried investors sell their

shares at the same time and thus lower prices as many are in summer with the clown the

panic swells far too much want to sell to reassure if the bank decides to create

a fund to buy back the shares that investors are selling en masse the fall is halted at the

end of the day there is a reassuring message from the banks and the government the future is stable

gold and nothing is resolved we have to wait until Monday October 28 at the end during the day on

Monday the fund created to buy back the shares is exhausted there are no more buyers but

worried investors continue to sell en masse the prices fall again at the end of the day you

can't really see it on Monday it's it was especially the next day when the stock market reopened

that the disaster happened it was black tuesday october 29, 1929 nothing could stop the collapse

of prices on the new york stock exchange the term crack appeared in the german press the

following three months the new york stock exchange loses half of its value it brings with it

the bankruptcy of banks more companies the whole economy this paralyzes few europeans are worried

at this time in the first months the crisis is seen as exclusively internal to the

united states some even hear that the collapse of the american stock market will benefit europe

if we resume the circular diagram the stock market crash immediately ruins small

investors they have less money they stop consuming they cannot no longer face

bank maturities the banks exposed with the clown lose the money that their customers can no

longer reimburse them my available money they no longer lend either to individuals or

to companies companies overvalued during the speculative bubble lose the confidence of

banks they have to reduce production layoffs maybe go bankrupt unemployment

increases the whole circular economy stops the whole economy paralyzes in a few months

that's when the banks will repatriate their capital

invested abroad which by ripple effect will cause the crisis

economically fragile germany falls into the crisis then all the european countries

keller roosevelt new american president proposes to the country a new deal in 1932

so that the state intervenes advised by economists including keynes he imagines public investment policy

he finances dams bridges tunnels he helps

the unemployed the goal is to restart the economic circuit by placing orders with companies

it is an injection of money which allows companies to reengage to have again the

confidence of the banks with the wages the people can again consume

and thus all the economic machinery can restart

on the diagram everything seems easy but in reality it will have been necessary to wait until November

1954 to find economic values ​​identical to October 29 at the new

york stock exchange if the new deal enabled the united states to emerge from the crisis many countries will

order military equipment in the 1930s rearmament is also a way

of reviving the economy with public money with the disastrous consequences that we know

[Music]