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Definition: Black Thursday
Black Thursday is the day the famous stock market crash began on October 24, 1929. This was followed by Black Monday and continued till black Tuesday on October 29. This also marked the start of the Great Depression. The stock market was very unstable during this period. The Dow Jones index fell by a large percentage decrease (11%), it continued to fall for three more years. This marked the wall street crash of 1929 and led to the subsequent Depression in 1930’s.
During 1920’s it became a trend to invest in the stock market. Everyone believed in the US economy. Investors and traders who lost significant amount of their money committed suicide. Richard Whitey who was the head of the New York Stock Exchange then, brought a lot of shares and his faith encouraged other to buy again but, this was temporary solution. Till Black Tuesday there was a big surge in the volume of shares traded i.e. over 30 million and most stock lost over $26 billion value.
This marked the end of the bull market and this period had hit the investors who borrowed money to buy stock the most. Many Banks who invested in the stock market also lost a significant amount of money and hence lost business as they were unable to give credit. The disposable income decreased on this account and hence prices of various commodities fell causing the Great Depression.
After the crash many laws were framed to improve the country’s infrastructure and prevent fraud by corporates. Most notable of them were the Securities Exchange Act 1934 and the Glass-Stegall Act of 1933.
Nowadays “Black Thursday” is also used to refer to the Thanksgiving holiday sales in the United states. Many retail stores open early to attract more customers and get a head start on the shopping for Black Friday.