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During a surge of speculative investors believing

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During
the prior decade, the U.S. stock market underwent a rapid escalation, with a
surge of speculative investors believing the bull market had no end. The
sentiment was excessive, with ‘unrealistic exuberance’ driving opportunists into
the market. The buyer overhang shifted the demand curve right, resulting in
share prices skyrocketing. The bull sentiment and crazy greed ran out of steam
in August 1929, when it reached its peak. Greed had blinded many to the fact
that the fundamentals had already turned. Production had already started its decline
and consequently unemployment was rising. This meant that the increasing share
prices had outstripped the companies’ real values. These initial fundamental
red flags helped to promote further declines in wages, increasing interest
rates, a flood of debt, a struggling agricultural sector and an excess of large
bank loans that could not be rectified.

Share prices
had begun to decline in September 1929, with the real fall only manifesting in
October 1929. On Black Thursday, the 24th October 1929, a record 12.89
million shares were traded as panic set in. On Friday, the 25th
October 1929, investment companies and leading bankers sought to stabilise the
market by buying up huge chunks of shares, and generated a moderate rally.
However, on Monday, 28th October 1929, referred to as Black Monday,
the market started to go into free-fall. On Black Tuesday, the 29th
October 1929, New York Stock Exchange share prices collapsed completely under
the deluge of selling, and a new record of 16.4 million shares traded on that
single day. The market capitalisation of the declined H1 by billions of
dollars, and thousands of investors (institutional and private) were wiped out.
The share price tickers ran hours behind, adding to the panic, as the exchange
and stock broker’s machinery could not handle the record volumes. By 1932 shares were
worth only about 20% of their value prior to October 1929.
By 1933, nearly half of America’s banks had failed, and unemployment was
approaching 15 million people, or 30% of their workforce.

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To add to the panic and risk, the markets and
market infrastructure were unsophisticated. Information about markets and
securities was slow in reaching investors, and the securities trading prices
(on the ticker tape) were not reflective of the information and activity around the
security. Additionally, the lack of market controls, regulatory oversight,
accounting standards and the like, intensified the perception that investing
was a form of gambling, best suited to the affluent and elite.

 H1Of the what???

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