When it comes to the USA stock markets, bubbles are everywhere. You have a Financial Asset Bubble. You have the Stock Bubble. You have a Dot com Bubble? Which one is going to burst first in 2014? Is this going to lead to a stock market bear market? Will it lead to a stock market crash?
Bubbles have been around prior to some of our biggest stock market crashes. Most have developed because an industry, or the government, has established some program that gives value for very little in return. It is a classic tale of supply and demand. A great example is the subprime mortgage bubble that existed in the mid-2000s.
People wanted houses with no or little money down. Banks and lenders were accommodating, giving people their dream houses, two or three times more expensive than was affordable by the buyer. All this worked like a charm until homeowners started missing their high mortgage payments, which proofed to be the pin that popped the housing bubble. Our economy tanked soon after into the Great Recession.
Depending on what you are reading, we will face different challenges in 2014. Some say we face a devaluation of the stock market because it is time for the market to correct itself. Some say the dot com craze has reached its saturation point so will implode at any time. Everyone seems to agree that something will give away very soon.
To help us prepare for the happy day, we have compiled a list of the biggest stock market crashes. These events have shaped us as a country. We have had many downturns in our stock markets, but only the ones that had a wider impact made our list. I am sure you can guess the top one, but read on to help prepare you for the impending doom of another bubble popping.
10 2010 Flash Crash
9 Panic of 1857
8 Black Monday
7 Black Friday
6 6.Panic of 1907
5 Panic of 1819
4 1990-1991 Recession
3 Dot Com Bubble
2 United States Bear Market 2007-2009
1 Wall Street Crash of 1929
The Wall Street Crash of 1929 ranked number one on our list because all the stock market crashes before and after were compared to it. This crash became the litmus test for all depressions and recessions. The Great Depression resulted from the crash. Millions of people lost everything. How many times during the Great Recession did you hear, "worst since the Great Depression." No stock market crash affected the country like the one in 1929. Many of the federal social programs in place today were passed during the Great Depression years. It changed the country forever.
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