Great Recession of 2008 vs Stock Market Crash of 1929

The first stock market crashed in 1929, also known as Black Tuesday was the most devastating stock market crash of the United States. Not only did it lead to a Great Depression that lasted around 10 years, it left many without a job and out of the streets trying to scavenge up food. This all started when people started taking out loans to invest in their stock when it rose. The market got caught up in a speculative bubble because shares kept rising and people believed that they would continue to do so. Prices rose almost 400%, but this wasn't the only bubble that the stock market came across. " In March 1929, the stock market saw its first major reverse, but this mini-panic was overcome leading to a strong rebound in the summer of 1929. By October 1929, shares were grossly overvalued. When some companies posted disappointing results on October 24 (Black Thursday), some investors started to feel this would be a good time to cash in on their profits; share prices began to fall and panic selling caused prices to fall sharply. Financiers, such as JP Morgan tried to restore confidence by buying shares to prop up prices. But, this failed to alter the rapid change in market sentiment.  On October 29(Black Tuesday) share prices fell by $40 billion in a single day. By 1930 the value of shares had fallen by 90%. The bull market had been replaced by a bear market."  http://www.economicshelp.org/blog/76/economics/wall-street-crash-1929/  The stock market had completely collapsed. Not only did the Stock Market fold, but so did so many community banks. All the money that people had borrowed to invest in their stocks was lost when they crashed. The people couldn't afford to pay back the banks. This started the Great Depression of 1929. Recently we experienced a The Great Recession of 2008. Fortunately our technology is so advanced that it didn't cause the entire market to fail and send us spiraling into another great depression. Economist Paul Krugman who wrote the book "The Return of Depression Economics" says  "I'm tempted to say that the crisis is like nothing we've ever seen before. But it might be more accurate to say it's like everything we've seen before, all at once: a bursting real estate bubble comparable to what happened in Japan at the end of the 1980s; a wave of bank runs comparable to those of the 1930s (albeit mainly involving the shadow banking system rather than the conventional banks); a liquidity trap in the United States, again reminiscent of Japan; and, most recently, a disruption of international capital flows and a wave of currency crises all too reminiscent of what happened to Asia in the late 1990s." http://www.stockexchangesecrets.com/us-stock-market-crash.html. Many people to this day don't even know that we experienced another economic set back. Unfortunately many others did as unemployment rates jumped from around 4.6% to 5.8%. And it had continued to increase since then.
In 2009 in jumped from 5.8% to 9.3%. Fortunately it started dropping in 2010 and has continued to do so. http://www.infoplease.com/ipa/A0104719.html
                                                               
                                                                        1929

 

2008