Business · Markets · 2 days ago
Debt and fear of missing out helped fuel the 1929 market crash
In October 1929, share prices collapsed in the United States after years of gains.
Many investors had borrowed money to buy shares, hoping to profit as prices rose.
When prices began to fall, panic selling deepened the crash.
The crisis helped push millions of people into poverty, and hundreds of banks failed.
The Dow Jones index did not return to its 1929 level until 1954.
After the crash, the United States created a financial regulator and Switzerland set up a banking commission.
The history is relevant because borrowing and fear of missing out can still make financial markets more vulnerable.
Debt-funded stock buying and fear of missing out helped drive the 1929 market crash, according to financial columnist Andrew Ross Sorkin.
After years of rising share prices, signs of overproduction and falling profits emerged in autumn 1929.
Panic selling hit Wall Street on October 24, known as Black Thursday, and the market collapsed further five days later on Black Tuesday.
The crash contributed to a crisis that left millions without jobs or homes and led hundreds of banks to fail.
The Dow Jones index did not regain its 1929 level until 1954.
- Who
- Investors who borrowed to buy shares contributed to the crash. Andrew Ross Sorkin identified debt and fear of missing out as key causes.
- What
- The US stock market crashed in October 1929, helping trigger a wider economic crisis.
- When
- October 1929. The article was published on October 9, 2026.
- Where
- Wall Street in the United States.
- Why
- Companies were producing too much and profits failed to materialise, while investors bought shares using borrowed money amid fear of missing out.
This story does not have two clearly opposing sides.
General Motors wanted to sell more cars and therefore began lending people money. Retailers began doing the same for household appliances. And then Charlie Mitchell, the CEO of National City Bank, later Citigroup, said: ‘Okay, we can lend people money so they can buy stocks.’
Debt, paired with FOMO – fear of missing out – the fear many people have of missing something. I think every major crisis we have ever had was the result of FOMO and too much leverage in the system.
Borrowing, which had been frowned upon before the First World War, became more accepted in the United States, according to Sorkin.
Signs emerged that many companies had produced too much and profits were not coming through, while share prices began to fall.
Panic selling hit Wall Street on Black Thursday.
The final collapse came on Black Tuesday, five days after Black Thursday.
Switzerland’s Federal Banking Commission, predecessor of Finma, began work.
The Dow Jones index reached its 1929 level again for the first time since the crash.
- Key causes
- Debt and fear of missing out, according to Andrew Ross Sorkin
- Black Thursday
- October 24, 1929
- Black Tuesday
- Five days after Black Thursday
- Banking oversight in Switzerland
- Federal Banking Commission began work in 1934
- Dow Jones recovery
- Regained its 1929 level in 1954
Sources
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