Do Now: What do you know about the Stock Market or Stocks?

Objectives: Students will be able to...(1) describe how the stock market works (2) analyze a video clip for key information

Agenda: 1. Stock Market2. Stock Market for

Dummies3. Pamphlet4. Crash! (No, not the Dave

Matthews Song)

Homework: Notes on Chapter 22, Section 1 DUE Tuesday (11/13)

Some Key Terms Stock Market: System for buying and selling shares of a company

Stock: Share or Percentage of a Company

Bull Market: Long period of rising stock prices (Lots of buying)

Margin: Buying on margin. Putting down small cash payment ($1,000 for $10,000 worth of stocks)

Broker: Works at market making investments for people

http://money.cnn.com/data/us_markets/

The Stock Market for Dummies You will watch a brief 10 minute clip on how the Stock

Market Works

With three or four other people: You will make a pamphlet someone could use to learn about the Stock Market

The cover can be a drawing or design

The middle two sections must have information answering the following questions: How does a company get on the Stock Market? (Aka, how do

they put stocks up for sale) How do people buy and sell stocks?

The back must be a ‘caution’ – Use the Crash as an example and warn people about some of the hazards of the market

Do Now: Summarize the picture below (Cite specific details)

Objectives Students will be able to...(1)

transfer knowledge about the Stock Market to a class activity (2) explain the basics of the stock market and how it collapsed

Homework: Notes for Chapter 22, Section 2 due THURSDAY (11/15)

CRASH!@!$#$%^$%!@$#%@#$&@$%

Toward the end of 1929 market was running out of new customers

Investors sensed danger and began to sell

Margin Calls: Brokers demanding the money from customers on margin investments

Frantic Selling: Lots of selling + little buying = Drastic drop in prices!

October 24th, 1929: Black Thursday (Enormous Plummet)

Groucho Marx Actor who made a small fortune and invested

in the stock market only to end up in debt described his broker the last time he went to see him: He was sitting in front of the now-stilled

ticker-tape machine, with his head buried in his hands. Ticker tape was strewn around him on the floor, and the place…looked as if it hadn’t been swept out in a week. Groucho tapped him on the shoulder and said ‘Aren’t you the fellow who said nothing could go wrong?’ ‘I guess I made a mistake,’ the broker wearily replied. ‘No I’m the one who made the mistake,’ snapped Groucho.’ ‘I Listened to you.’

Quoted in 1929 after the Great Crash

Black Tuesday

October 29th, 1929

Stocks lost $10-15 BILLION in value that day

By mid-November, $30 billion lost (Almost as much as total wages earned by Americans in 1929)

Stock Market collapse not the major cause of Depression, but strongly hurt economy

Banks Banks lent money to speculators

Eventually defaulted on loans

Banks invested depositors money Lost money they invested

Banks couldn’t afford to give loans Result: People/Businesses

couldn't’t borrow money, which put economy in recession

Large number of people went to withdraw money and banks ran out

Cyclical Effect

People bought things on Installment Plans (Pay in small increments)

Later on, people stop buying things Companies don’t make $ Companies can’t pay workers people get laid off people don’t buy things