For first, Paqui has reminded us the schemes we had to copy in last class, and after we've copied this from the blackboard:
Wall Street Crash of 1929
24th October (Black Thursday): -11%
25th October : -6.4%
28th October (Black Monday) : -13%
29th October (Black Tuesday) : -12%
-42.4% of its value
In four days only.
For second, we've continued the class checking the exercises. Silvia has checked the first exercise, which was about how the crisis of 1929 spread to Europe:
The public evidence of the crisis came on the 24th October 1929, when the price of stocks in Wall Street fell down. The stockholders panicked and tried to sell their stocks massively. Prices shrunk, many investors got ruined and they couldn't give their loans back. Bnacks crashed down and economy collapsed. When the USA banks asked the European banks for the money they had lent them before, the crisis spread to Europe and the Great Depression became a world problem.
Paqui has explained this in the blackboard and we've seen how Herbert Hoover intevened:
- At the beginning, no reaction following the liberal orthodoxy (no intervention of the State in economy).
- Later there was a deflation (tried to keep prices and salaries low).
- And protectionism: increased tariffs to protect industry.
After that we've started checking exercise 5, which was about the different decisions made to reduce the impact of the Great Depression. We've started checking it, but we haven't could finish it because the bell has rung:
F.D. Roosevelt won them in 1932 with a program called New Deal and when his government started ruling in March 1933 the Congress and the President issued a lot of laws (Alphabet Laws) in order to recover economy.
To foreclose- Embargar
N.Y. Stock Exchange Market- Crack de la Bolsa de N.York
To panick- Entrar en pánico/Aterrorizarse
To warn- Advertir
Risk bonus- Prima de riesgo