We have been witnesses to some of the worst stock market crashes ever known. Driven by panic and external economic factors, a stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market. The results are significant losses of paper wealth. Usually occurring after a prolonged period of rising stock prices and excessive economic optimism, these events are almost as old as the stock market itself. In fact, there has been hundreds of stock market crashes over the past decades! Today, we will take a look at some of the worst ones. From the Wall Street Crash of 1929 to the Eurozone Crisis, these are 25 Of The Worst Stock Market Crashes in History.
Kipper und Wipper
One of the oldest stock market crashes in human history, Kipper und Wipper was a financial crisis caused by debased (fraudulent) foreign coins minted in the Holy Roman Empire from 1621-1623, done to raise funds at the start of the Thirty Years’ War. The name refers to the use of tipping scales to identify not-yet-debased coins, which were then taken out of circulation, melted, mixed with baser metals such as lead, copper or tin, and re-issued.
Tulip Mania Bubble
The Tulip Mania Bubble was a period in the Netherlands during which contracts for bulbs of tulips reached extraordinarily high prices and suddenly collapsed. At the peak of the tulip mania, in March 1637, some single tulip bulbs were sold for more than 10 times the annual income of a skilled craftsman. The term “tulip mania” is now often used metaphorically to refer to any large economic bubble when asset prices deviate from intrinsic values.
Bengal Bubble of 1769
The Bengal Bubble of 1769 was caused by the increasing overvaluation of the East India Company stock between 1757 and 1769. Eventually, this resulted in the Great East Indian Crash of 1769. The bubble and crash occurred in the wake of the conquest of Bengal by the East India Company that acquired increasing powers in Bengal through the installation of the puppet regime of Mir Jafar. This control included control of the tax collection rights for the province from the weak and declining Mughal Empire.
Panic of 1792
Panic of 1792 was a financial credit crisis that occurred in March and April 1792, precipitated by the expansion of credit by the newly formed Bank of the United States as well as by rampant speculation on the part of William Duer, Alexander Macomb, and other prominent bankers. The bankers attempted to drive up prices of US debt securities and bank stocks, but when they defaulted on loans, prices fell, causing a bank run. Simultaneous tightening of credit by the Bank of the United States served to heighten the initial panic.
Caused by the efforts of two speculators, Jay Gould and his partner James Fisk to corner the gold market on the New York Gold Exchange, the Black Friday was a gold panic that occurred on September 24, 1869. On that day, the conspiracy was revealed, sending the stock market into a free-fall. The scandal took place during the Presidency of Ulysses S. Grant whose policy was to sell weekly Treasury gold to pay off the national debt, stabilize the dollar, and boost the economy.