Wall Street crash?

>Why/how did the wall street crash happen?
federal reserve created a bubble.
then when it burst, the government stepped in with crazy socialist and protectionist policies which turned a bust into a global recession.

>reading other headlines, see "semite lobby" and have to look again

en.wikipedia.org/wiki/Crisis_of_1772
credit crisis of 1772 originated in London and then spread
the banking house fled to avoid debt repayment, and the resulting collapse of the firm stirred up panic in London. Economic growth at that period was highly dependent on the use of credit
As confidence started ebbing, paralysis of the credit system followed: crowds of people gathered at the banks and requested debt repayment in cash
As a result, twenty important banking houses went bankrupt or stopped payment
Until the outbreak of the credit crisis, the period from 1770 to 1772 was considered prosperous and politically calm in both Britain and the American colonies.

Effects on thirteen colonies
The Crisis of 1772 set off a chain of events related to the controversy over the colonial tea market. The East India Company was one of the firms that suffered the hardest hits in the crisis. Failing to pay or renew its loan from the Bank of England, the firm sought to sell its eighteen million pounds of tea from its British warehouses to the American colonies.
Back then the firm had to market its tea to the colonies through middlemen, so the high price made its tea unfavorable compared to the tea that was smuggled to or was produced locally in the colonies. In May 1773, however, the Parliament allowed the firm to sell directly through its own agents.
The Tea Act enabled the East India Company’s monopoly over the local tea business in the colonial. Furious about how British government and the East India Company controlled the colonial tea trade, citizens rejected the imported tea, and these protests eventually led to the Boston Tea Party in 1773.
The crisis also worsened the relationship of the North American colonies and Britain, due to the fact that it affected all 13 of the colonies, and due to the fact that the British were forced to introduce controversial legislation for the colonies in an attempt to remedy the crisis.

en.wikipedia.org/wiki/Neal,_James,_Fordyce_and_Down
was a London banking house. its June 1772 collapse precipitated a major banking crisis which included the collapse of almost every private bank in Scotland, and a liquidity crisis in the two major banking centres of the world, London and Amsterdam. The bank had been speculating by shorting East India Company stock on a massive scale, and apparently using customer deposits to cover losses.
day his bank had to close, and two days later, three other London banking firms with Scottish connections collapsed, and in the twelve days after Fordyce fled, 22 significant banks
In London the Bank of England was able to stabilize the situation, but attempts in London to save the situation in Scotland failed. The liquidity crisis spread to the next most important banking centre in Europe, Amsterdam, where Clifford and Sons went bankrupt

The crisis has also been seen as worsening relations between Britain and the Thirteen Colonies in America
the East India Company, already in financial difficulties, was further weakened by the crisis, and in 1773 managed to persuade Parliament to pass the Tea Act, exempting it from the duty all other importers in the colonies had to pay. The unpopularity of this led to the Boston Tea Party at the end of the year.

oh do you mean the 2009 crash?

Oh that was caused by high oil prices, which caused inflation and the federal reserve to raise rates rapidly, both of which triggered a a sub-prime mortgage meltdown.

Banks were lending money to people to buy houses who had no business buying a house.
Mortgages were packaged in MBS (mortgage backed securities), which were then insured by insurers like AIG (credit default swaps), and they were also backed by Fannie Mae and Freddie mac, both government sponsored entities created to help poor people afford mortgages.

So these MBS were all junk, but rated as AAA by rating agencies that were basically paid off to look the other way, and when the oil prices got high and crashed the housing market, these MBS instantly became worthless and locked up credit markets around the globe.
Ultimately the fault lies with the government entities backing this paper in the first place, fannie and freddie, and the fed reserve, and government policies designed to encourage subprime lending.

ehs.org.uk/press/the-financial-crisis-of-1772-3-when-the-bank-of-england-first-responded-to-systemic-risk
THE FINANCIAL CRISIS OF 1772-3: When the Bank of England first responded to systemic risk
The 1772-3 credit crisis is historically notable for being one of the earliest purely financial crises, with neither government policy nor European war lying at its root. It also seems to be one of the first times that the Bank of England responded to fears of financial contagion, taking forceful action to deal with the systemically important players whose failure might exacerbate the crisis.
describes the breadth of scope, rapidity and size of the Bank of England’s intervention, acting as de facto ‘lender of last resort’ (LLR) to the financial system
One rascally and extravagant banker has brought Britannia, Queen of the Indies, to the precipice of bankruptcy! It is very true, and Fordyce is the name of the caitiff. He has broken half the bankers.
this was a significant shock to British finance, and for a brief moment ‘a universal bankruptcy was expected
Aftershocks were felt as far afield as Amsterdam and the North American colonies, then still very much a part of the British Empire.
The Bank of England appears to have been concerned enough as to intervene actively in the money markets It provided liquidity
It furthermore advanced direct short-term credits to selected bankers, and even lent substantial amounts on long-term mortgage security, which contravened its usual policy of only lending against good bills of exchange. A large bailout of the Ayr Bank was also authorised

So Mexicans, niggers, and fat people crashed the country.

en.wikipedia.org/wiki/1772_in_Great_Britain
10 June – credit crisis of 1772 is triggered when, following the flight of their partner Alexander Fordyce to France, the London banking house of Neal, James, Fordyce and Down (which has been speculating in East India Company stock) suspends payment. The resultant panic causes other banks, particularly in Scotland, to fail, extends to Amsterdam and the Thirteen Colonies of British North America, and threatens the East India Company with bankruptcy.

britannica.com/list/5-of-the-worlds-most-devastating-financial-crises
5 of the World’s Most-Devastating Financial Crises
1. The Credit Crisis of 1772
This crisis originated in London and quickly spread to the rest of Europe. In the mid-1760s the British Empire had accumulated an enormous amount of wealth through its colonial possessions and trade. This created an aura of overoptimism and a period of rapid credit expansion by many British banks. The hype came to an abrupt end on June 8, 1772, when Alexander Fordyce—one of the partners of the British banking house Neal, James, Fordyce, and Down—fled to France to escape his debt repayments. The news quickly spread and triggered a banking panic in England, as creditors began to form long lines in front of British banks to demand instant cash withdrawals. The ensuing crisis rapidly spread to Scotland, the Netherlands, other parts of Europe, and the British American colonies. Historians have claimed that the economic repercussions of this crisis were one of the major contributing factors to the Boston Tea Party protests and the American Revolution.

Wrong amigo. It was the housing bubble that crashed the economy in 2008

Basically,

Average, ordinary people started becoming able to purchase and trade private company stocks, rather than the stable government bonds they were accustomed to. These people had mostly no fucking idea what they were doing. They all thought they were going to become wealthy as fuck.

When the shit hit the fan and prices started to drop, they went nuts and tried to pull out all their money, losing millions and millions of dollars.

en.wikipedia.org/wiki/Timeline_of_the_United_States_housing_bubble

1938: Fannie Mae is established as part of Franklin D. Roosevelt's New Deal

1974: Equal Credit Opportunity Act imposes heavy sanctions for financial institutions found guilty of discrimination on the basis of race, color, religion, national origin, sex, marital status, or age

1977: Community Reinvestment Act is enacted to address historical discrimination in lending, such as 'redlining'. The Act encourages commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods

1992: Federal Housing Enterprises Financial Safety and Soundness Act of 1992 required Fannie Mae and Freddie Mac to devote a percentage of their lending to support affordable housing

1993: The Federal Reserve Bank of Boston published "Closing the Gap: A Guide to Equal Opportunity Lending", which recommended a series of measures to better serve low-income and minority households, including loosening income thresholds for receiving a mortgage, influencing government policy and housing activist demands

1995: New Community Reinvestment Act (CRA) regulations break down home-loan data by neighborhood, income, and race, enabling community groups to complain to banks and regulators about CRA compliance. Fannie Mae allowed to receive affordable housing credit for buying subprime securities.

1996: President Clinton's "National Homeownership Strategy"

1997: Mortgage denial rate of 29 percent

1999: Fannie Mae eases the credit requirements to encourage banks to extend home mortgages to individuals whose credit is not good enough to qualify for conventional loans.

2000: Fannie Mae commits to purchase and securitize $2 billion of Community Reinvestment Act eligible loans and announces that the Department of Housing and Urban Development (“HUD”) will soon require it to dedicate 50% of its business to low- and moderate-income families" and its goal is to finance over $500 billion in Community Reinvestment Act related business by 2010.

2002: Bush unveils his "Blueprint for the American Dream". He sets goal of increasing minority home owners by at least 5.5 million by 2010 through billions of dollars in tax credits, subsidies and a Fannie Mae commitment of $440 billion

2003: Mortgage denial rate of 14 percent for conventional home purchase loans, half of 1997.

2004: HUD ratcheted up Fannie Mae and Freddie Mac affordable-housing goals for next four years

2008:
March Bear Stearns
September Lehman Brothers

the high oil prices popped the bubble...

You must be 3rd world. Did you not see the movie the Big Short? Millions of people were given house loans when they couldn't afford them. When the stopped paying the loans the enconomy crashed.

en.wikipedia.org/wiki/Crisis_of_the_Third_Century
was a period in which the Roman Empire nearly collapsed under the combined pressures of economic depression.
The crisis resulted in such profound changes in the empire's institutions, society, economic
the crisis ended with the ascension and reforms of Diocletian in 284.

the empire faced hyperinflation caused by years of coinage devaluation.
runaway rises in prices, and by the time Diocletian came to power, the old coinage of the Roman Empire had nearly collapsed.

One of the most profound and lasting effects of the Crisis of the Third Century was the disruption of Rome's extensive internal trade network.
The widespread civil unrest made it no longer safe for merchants to travel as they once had, and the financial crisis that struck made exchange very difficult with the debased currency. This produced profound changes that, in many ways, foreshadowed the very decentralized economic character of the coming Middle Ages.

Large landowners, no longer able to successfully export their crops over long distances, began producing food for subsistence and local barter. Rather than import manufactured goods from the empire's great urban areas, they began to manufacture many goods locally, often on their own estates, thus beginning the self-sufficient "house economy" that would become commonplace in later centuries, reaching its final form in the Middle Ages' manorialism.

Made desperate by economic necessity, many of these former city dwellers, as well as many small farmers, were forced to give up hard-earned basic civil rights in order to receive protection from large land-holders. In doing so, they became a half-free class
They were tied to the land, and in later Imperial law their status was made hereditary. This provided an early model for serfdom, the origins of medieval feudal society and of the medieval peasantry.

in spite of extensive reforms by later emperors, the Roman trade network was never able to fully recover to what it had been during the Pax Romana (27 BC – AD 180)

While Imperial revenues fell, Imperial expenses rose sharply. More soldiers, greater proportions of cavalry, and the ruinous expense of walling in cities all added to the toll. Goods and services previously paid for by the government were now demanded in addition to monetary taxes. The steady exodus of both rich and poor from the cities and now-unprofitable professions forced Diocletian to use compulsion; most trades were made hereditary, and workers could not legally leave their jobs or travel elsewhere to seek better-paying ones.

The decline in commerce between the Imperial provinces put them on a path towards increased self-sufficiency. Large landowners, who had become more self-sufficient, became less mindful of Rome’s central authority, particularly in the Western Empire, and were downright hostile towards its tax collectors. The measure of wealth at this time began to have less to do with wielding urban civil authority and more to do with controlling large agricultural estates in rural regions, since this guaranteed access to the only economic resource of real value — agricultural land and the crops it produced. The common people of the Empire lost economic and political status to the land-holding nobility, and the commercial middle classes waned along with their trade-derived livelihoods. The Crisis of the Third Century thus marked the beginning of a long gradual process that would transform the ancient world of Classical antiquity into the medieval one of the Early Middle Ages.

i like how everyone's giving different, contradictory answers. good job on being fucking retards and confusing the op even more

>When the stopped paying the loans the enconomy crashed.
can you read? they stopped paying because of high oil prices. those hurt poor people a lot. also, the interest rates were high. making it more expensive to borrow money. god damn you are stupid. I saw it happen in real time. look at the charts.

They shouldn't have qualified for the loans given to them in the first place. It has nothing to do with oil.

look at this.

I said all that in my post. u don't read I guess.

I said those people shouldn't have been given the loans. They normally wouldn't qualify for them. Therefore they would have never been able to pay back the loans. It has nothing to do with interest rates or oil prices.

en.wikipedia.org/wiki/List_of_bank_runs
In 1656 Johan Palmstruch was given permission by the Crown of Sweden to start a bank, Stockholm Banco. In 1661 it became the first in Europe to give out banknotes. As lending rose rapidly in just a few years, the value of the banknotes began to fall. In 1664 the bank closed operations, unable to give back the customers money. Palmstruch was imprisoned, the Crown took over the bank, and formed what is still today Rikets Ständers Bank, the national bank of Sweden

en.wikipedia.org/wiki/Sveriges_Riksbank
Sveriges Riksbank, or simply Riksbanken, is the central bank of Sweden. It is the world's oldest central bank[2][3] and the 3rd oldest bank still in operation.
founded by Johan Palmstruch in 1656. Although the bank was private, it was the king who chose its management: in a letter to Palmstruch, he gave permission to its operations according to stated regulations. But Stockholms Banco collapsed as a result of the issuing of too many notes without the necessary collateral. Palmstruch, who was considered responsible for the bank's losses, was condemned to death, but later received clemency.

Hmmmm

en.wikipedia.org/wiki/Roman_economy#The_Financial_Crisis_of_33AD
The financial crisis of 33AD is largely considered to be caused by credit easing policies that Tiberius took in order to limit the aristocrats' wealth and land-ownership, and done in response to Augustus's massive private and public expenditures. Prior to 33AD, Augustus engaged in lavish spending in the public and private sector, while greatly encouraging land ownership and investment in real estate
Augustus thought that all citizens should have access to land and money. As a result, he aggressively engaged in a massive extension of credit into the real estate and public sector, and engaged in riskier and riskier loans.
Due to his policies, land and real estate prices rose dramatically, benefitting his wealthy and noble land-owner friends who owned large amounts of property and invested heavily in real estate.
Tiberius noticed such collusion, and looked to curb the amount of land that the wealthy and elites owned, as well as control the rapidly inflating money supply. He engaged in heavy austerity policies such as ordering for all loans be paid off immediately, and began confiscating property from the wealthy land-owners, in what is now known as monetary easing. By restricting loans for land purchasing, and the demand to pay loans in full, debtors were forced to sell off their property and real estate, which drastically dropped real estate and land prices. Paired with Tiberius' credit easing policy and the Senate naively demanding that people continue to invest in land despite what was going on, massive deflation occurred which ultimately cause the market to collapse. This financial crisis and Tiberius' engagement in Quantitative easing is one of the earliest records of monetary policy being used to adjust economic conditions. Some of Tiberius's practices are still used in monetary policy today.

What's with the wikipedia history lesson?

People didn't have money to buy all the good factories were creating. 90 percent of the world was peasants and coal-miners so they couldn't afford cars and radios