Why did the stock market boom in the 1920s?
（I don’t understand, why did the stock market boom in the 1920s? Please give a detailed answer and include a link that I could follow for more research on ‘the boom”. Thank you.）
Answer ：
The stock market boomed in the 20′s because of easy loans. Almost anyone could get a margin loan and buy stock without actually owning it. They were all borrowing from the banks. Unlike the margin requirements today, people loaned large amounts that they did not have. The bankers got worried and started calling in the margin loans forcing people to sell or cover their positions. This created a panic.
History always repeats itself only today it wasn’t margin loans but debt in real estate, home equity and credit cards.
Posted: July 29th, 2010 under US Stock Market.
Tags: stock market boom