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143 votes
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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 ...
Denis de Bernardy's user avatar
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 ...
Schwern's user avatar
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36 votes
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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.
Aaron Brick's user avatar
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23 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 ...
tj1000's user avatar
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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 ...
Lars Bosteen's user avatar
10 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 ...
T.E.D.'s user avatar
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10 votes
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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 ...
Lars Bosteen's user avatar
9 votes
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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 ...
Semaphore's user avatar
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8 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 ...
Yulia V's user avatar
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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, ...
Lars Bosteen's user avatar
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):
Dmitry Rubanovich's user avatar
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 ...
Mark Johnson's user avatar
  • 9,724
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 ...
Radovan Garabík's user avatar
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 (...
jwenting's user avatar
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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 ...
jamesqf's user avatar
  • 2,885
5 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 ...
Tom Au's user avatar
  • 104k
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 ...
sempaiscuba's user avatar
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4 votes
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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 ...
Pieter Geerkens's user avatar
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 ...
Lars Bosteen's user avatar
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 ...
corsiKa's user avatar
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4 votes
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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 ...
T.E.D.'s user avatar
  • 119k
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 ...
Pieter Geerkens's user avatar
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 ...
KillingTime's user avatar
  • 4,781
3 votes
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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's user avatar
  • 33.7k
3 votes

How did the accounting and capital organization system work in communist countries like the USSR? Did ideology justify or undermine the system?

The economy of Soviet union was not based on relations which you mention, in particular the word "capital" makes no real sense when we are talking about Soviet economy. It was a "...
Alex's user avatar
  • 38.8k
3 votes

How did the accounting and capital organization system work in communist countries like the USSR? Did ideology justify or undermine the system?

The Soviet Union had a continuously functioning value-form ("capitalism") society, using state ownership and conflicting sub-state ("bureaucratic") competitive control of state ...
Samuel Russell's user avatar
2 votes

What factors led to much higher US war bond sales and participation rates in WWII over that of WWI?

The reason for the disparity is that the supply of Liberty Bonds was limited. All Five campaigns were not only over subscribed, but sold out quickly. To avoid a failure to sell the entire bond issue, ...
Pieter Geerkens's user avatar
2 votes

How were wars financed under Islamic empires?

In the early Islamic empires, the state charged an alms tax on Muslim subjects (zakat). It was mainly intended for charity but war "in the path of God" (jihad) was also a permitted use for it. This ...
NashvilleTele's user avatar
2 votes

How did Islamic finance under the early Caliphates profit or take loans if charging interest wasn't legal?

Given that riba is prohibited, as I understand, OP is asking about consumer loans and banks making a profit. The full-explanation requires detailed consideration of politics and philosophy of Islam. ...
J Asia's user avatar
  • 6,323

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