Part 5/10:
Despite these warning signs, the prevailing sense of optimism prevailed, masking a dire economic reality. The reckless use of margin—where buyers leveraged loans to purchase stock—allowed individuals to invest with minimal capital. In 1929, a staggering 40% of consumer debt was allocated to stocks.
The Collapse: Black Thursday and Beyond
The facade of prosperity crumbled on October 24, 1929, a day now referred to as Black Thursday. The stock market experienced a drastic decline, with a staggering 12.9 million shares sold and an 11% drop in value. This event was merely the precursor to an even deeper fall, culminating in Black Tuesday the following week, which saw the market plummet by 12% and lose about a third of its value in just two weeks.