Crash is the phenomenon that a large number of securities are thrown out in the securities market for some reason, which leads to an infinite decline in the price of the securities market. This phenomenon of selling a lot of securities is also called selling a lot. Then why did the stock market crash?

Reasons for the formation of the stock market crash

1. A country's macroeconomic fundamentals have seriously deteriorated, making it difficult for listed companies to operate;

2. Low-cost direct financing leads to "inefficient" finance and "inefficient" economic development, which greatly promotes a bubble and causes the stock price to be seriously overvalued.

3. There are serious defects in the listing and trading system of the stock market itself, which leads to the prevalence of speculation and the loss of investment value and resource allocation function of the stock market.

4. Political, military, natural disasters and other crises have severely hit the confidence of the securities market, and the securities market has experienced psychological panic and cannot continue to operate normally.

Case of stock market crash

1. Chinese stock market crash

Look back to China. Although the development of China's stock market is relatively short compared with western developed market economy countries, it still experienced two soul-stirring stock market crashes. One happened in 1996. After the National Day in 1996, the stock market was all red. From April 1st to December 9th, the Shanghai Composite Index rose by 12%, and the Shenzhen Component Index rose by 34%. The CSRC issued various regulations and notices that were later called "12 gold medals" in order to cool down, but the market continued to climb. On December 16th, People's Daily published a special commentator's article "Correctly Understanding the Current Stock Market", which defined the stock market as: "The recent skyrocketing is abnormal and irrational." The rise was finally curbed. The Shanghai Composite Index reached the limit position at the opening. Except for a few small-cap stocks, it closed the limit all day and still fell the next day. All the paper wealth of all the investors who held positions three days ago evaporated. Another time happened in 21. On July 26 of that year, the reduction of state-owned shares officially began in the issuance of new shares, and the stock market plummeted, and the Shanghai Composite Index fell by 32.55 points. By October 19th, the Shanghai Composite Index had dropped from 2,245 points on June 14th to 1,514 points, and more than 5 stocks were down. In that year, 8% of investors were trapped, the net value of the fund shrank by 4%, and the brokerage commission income fell by 3%. Compared with foreign stock market crash, the causes of China stock market crash are not the same, but they all have some * * * characteristics: the trend of the stock market is greatly divorced from the fundamentals of the economy, so it is doomed to be unsustainable. When there is a sign of trouble, it will collapse across the board, while people in the stock market are too speculative, or they will still struggle to do it when the wind and rain come, or chase up and sell down all by feeling, which will inevitably lead to a tragic end.

2. Within an hour of new york's 1929 crash, 11 speculators committed suicide. Thursday, October 24th, 1929. The first day of the great panic in 1929 also gave people the most profound brand of the stock market crash. On that day, the number of shares changed hands reached 1,289,46, and many of them were sold at low prices, which caused the hopes and dreams of their holders to be dashed.

But looking back, the disaster happened without warning. At the opening, there were no noticeable signs, and the stock index was still very strong for a while, but the trading volume was very large.

suddenly, the stock price began to fall. At 11:, the stock market went crazy and people rushed to sell. By 11:3, the stock market has been completely at the mercy of blind and ruthless panic, and it has plummeted. Suicide has spread since then, and within an hour, 11 well-known speculators committed suicide.

In the following days, the new york Stock Exchange ushered in the most difficult period since its establishment 112 years ago, and the crash occurred, which lasted longer than any previous experience. And those speculators who are alive, the next days are not as good as death. A story before and after the stock market crash in 1929 told by Fred Schwieder Jr. in "Where is the Customer's Yacht" became a classic portrayal of speculators in that period.

An investor had a fortune of $7.5 million at the beginning of 1929. At first, he kept his head, used 1.5 million of it to buy free government bonds, and then gave it to his wife, telling her that it would be all the expenses they needed in the future. If one day he asked her for these bonds again, he must not give them to him, because at that time he had lost his head.

and at the end of 1929, that day came. He spoke to his wife, saying that he needed additional margin to protect the other $6 million he invested in the stock market. His wife refused at first, but she was finally persuaded by him. The ending of the story can be imagined. They ended up with all their money.

In fact, this kind of experience has not only befallen ordinary irrational investors, but even some wise economists have not escaped bad luck. Keynes, the most famous economist in the 2th century, also came close to bankruptcy in this crisis.