145
votes
Accepted
Why did stock brokers go bankrupt after the crash of 1929?
To expand on Schwern's answer somewhat, using leverage as a trader works more or less like this:
Scenario 1: you have $1k of play money and use it to buy stocks. The market goes up 10%. You sell. You ...
- 23.2k
86
votes
Why did stock brokers go bankrupt after the crash of 1929?
If they did, it would be because of the practice of buying on margin, a form of loan from your broker where you use the stocks themselves as collateral. This allows you to buy more stock than you have ...
- 54.7k
36
votes
Accepted
Venezuelan crisis of 1902–03: Why is there a Russian flag on the cover of the prominent newspaper 'Le Petit Parisien'?
I think this is a color error (in reproduction, printing, fading, etc.) It is a 19th Century Venezuelan flag with the cluster of stars visible on the blue bar.
- 27.6k
24
votes
Why did stock brokers go bankrupt after the crash of 1929?
Brokers went bust due to an aspect of investing that isn't often covered by mainstream media: the margin call.
When you buy stocks on margin, meaning you're borrowing the money to buy a lot of the ...
- 3,451
20
votes
Why did Charles I not borrow abroad?
SHORT ANSWER
Charles I did borrow money from abroad but it was never enough to meet his needs. The financial drain of the Thirty Years War on much of Europe, a muddled foreign policy, and a lack of ...
- 108k
12
votes
What percentage of Jews were in "finance" (money-lenders) throughout Middle Ages?
The number of Jews who lent money in the Middle Ages is unfortunately commonly over-estimated. The majority of Jews had jobs that did not involve money-lending. This is a fairly new historical ...
- 121
10
votes
Accepted
What factors led to much higher US war bond sales and participation rates in WWII over that of WWI?
The article cited by Pieter Geerkens asserts that all the bonds issues were oversubscribed, and this is backed up by this other source. Wikipedia here and here, Investopedia and the Museum of American ...
- 108k
9
votes
Accepted
Which tools were available in 1933 for the Chinese government to intervene in the money market?
The short answer is that there was little in the way of pre-defined tools, but the government could rely on its governing and legislative powers to intervene on an ad-hoc basis.
There was no coherent ...
- 97.2k
9
votes
Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?
The author was mixing up cause and effect.
The position that the 2008 crash was largely caused by the behavior of lending institutions is quite supportable. The lending bubble was pretty much ...
- 117k
8
votes
Accepted
What were factors that led to a decline in bond yields during World War II given that the opposite should have happened?
Bond yields dropped as it became more and more apparent that the United States would win the war. Then the war expenditures were seen an "investment" in a lasting and durable peace. At the end of ...
- 104k
8
votes
How was Napoleon's military funded just a decade after the French Revolution ostensibly because of bankruptcy/mismanagement of funds?
From 1799 (when Napoleon became First Consul of France) to 1805, the French treasury was most dependent on taxes from France and its empire. After 1805, conquered territories in Europe such as Spain, ...
- 108k
7
votes
Venezuelan crisis of 1902–03: Why is there a Russian flag on the cover of the prominent newspaper 'Le Petit Parisien'?
After zooming in, it does look like the white part is a faded yellow and there is a circle of stars in the middle of the flag (as pointed out in Aaron's answer):
7
votes
Has there ever been a case where a country adopted the currency of another country with a smaller economy?
United States of America used Spanish dollar as the (sole) currency until 1792 - it even remained a legal tender until 1857.
EDIT: In 1820 (when the Spanish dollar was still a legal tender and widely ...
- 1,711
7
votes
Has there ever been a case where a country adopted the currency of another country with a smaller economy?
Since Fiat money (paper banknotes) are often based on the strength of an economy of the country that issued it, it is unlikly that a bigger economy would be able to use the currency of a smaller ...
- 9,490
7
votes
Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?
During the crisis I worked in the team that was creating pricers for the complex derivatives in the bank where CDSs were invented.
2007-8 crisis has many reasons. The origin of it lies in easing the ...
- 1,571
6
votes
Accepted
What is the oldest debt that any country is paying right now, and to whom?
As Semaphore points out, the UK is paying interest on consolidated annuities. His links are better, but here is a story from the New York Times. (Note: Semaphore corrected my quibble about UK vs GB; ...
MCW♦
- 31.9k
6
votes
Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?
Fairly obviously not. The problems of 2008 were the consequence of a great many people (far more than the total number of Ivy League graduates), all acting in ways that they thought would be ...
- 2,905
6
votes
Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?
What you referred to about "top graduates" was a "symptom," but not the underlying "disease."
The real problem was the "pedal to the medal," and "anything ...
- 104k
6
votes
Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?
I worked in the financial services industry back in 2007/8 in software engineering and saw the crash happen with a front row seat.
The root cause of the crash was the massive overvaluation of CDS (...
- 11.3k
5
votes
Were debts owed or outstanding debts factored into the Roman census?
tl;dr
Yes, it appears that debts were taken into account by the censors, and that details were provided as part of the statement given by every Roman citizen to the censors.
This is an interesting ...
- 77.2k
4
votes
Accepted
How did the debt collection of Gregorius IX work?
This mechanism is describing the cheque. It was not sufficient to present the "cheque", one also had to establish one's identity as the "payee" - just as in a modern chequing transaction.
That this ...
- 71.9k
4
votes
Why were eighteenth century financial inventions only patentable under French law for 21 months?
SHORT ANSWER
The French Assemblée nationale législative saw financial patents as 'dangerous' as they were open to abuse and could be used to exploit people. The issue of speculation was a major ...
- 108k
4
votes
Accepted
Why were eighteenth century financial inventions only patentable under French law for 21 months?
tl;dr: France was going through a revolution and needed funds. Patenting financial schemes seemed like a way to spur interest in devising new ways of raising funds. Either due to ethics or ...
- 642
4
votes
What were factors that led to a decline in bond yields during World War II given that the opposite should have happened?
The return on a bond can, to a first approximation, be thought of as the inverse of it's price. When bond yields drop this means their price rose - due to either decreased supply or increased demand. ...
- 71.9k
4
votes
What were the factors that caused debtors' prison to disappear in most parts of the world in the 20th century?
In 1976 the practice was abolished by the UN under "the International Covenant on Civil and Political Rights"on the grounds that "No one shall be imprisoned merely on the ground of inability to ...
- 59
4
votes
Accepted
Did the historic events behind the film The Big Short happen under Glass Steagall?
Ummm..no.
As a bit of background, Glass Steagall was passed in the wake of the Great Depression to prevent commercial banks, or entities affiliated with commercial banks, from speculating in ...
- 117k
3
votes
Did the historic events behind the film The Big Short happen under Glass Steagall?
It does depend on what you mean by "under Glass Steagall" as it was only partially in place in 2007-8.
As the wikipedia page for the Glass-Steagall legislation mentions, the Glass-Steagall ...
- 4,772
3
votes
Accepted
How did the check pattern help with financial computations?
Surprisingly difficult to find a good image to illustrate this. I think the description in Wikipedia is as clear as any I've read:
The Exchequer was named after a table used to perform ...
MCW♦
- 31.9k
3
votes
Accepted
How did Islamic finance under the early Caliphates profit or take loans if charging interest wasn't legal?
Partly through semantics, by replacing use of "interest" either as a term or calculation by a complete system of "reciprocal gifts". In a sense, there is a bit of willful blindness ...
- 71.9k
Only top scored, non community-wiki answers of a minimum length are eligible