November 8, 2007 (End of unit two)

November 8, 2007 (End of unit two) - Early Financial Panics...

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Early Financial Panics Introduction o Early Modern Era (1500s – 1700s) New commodities Colonies Global Commerce Joint stock companies Precursors to modern day corporations o Organized for undertakings that required large amounts of capital o Money was raised for these ventures by selling stocks o Shareholders then had a percentage of the profit equal to the amount it invest o Financial manias and panics Speculation o Purchasing and waiting till it increases in value to sell at a later date o Speculators Those who believe prices will keep on climbing indefinitely Those who believe that they are smart enough to get out in time o Ended in dismal failures Keep occurring over and over in history More recent eg. 1929 NY Stock market crash Dot-Com and High Tech crash in 2000-2001 Tulip Mania o Earliest financial panics of the early modern ages o Occurred in today’s Netherlands, crashed in 1637 Dutch developed highly commercialized agricultural economy Developed densely populated urban regions Even over seas empire o Global commerce allowed the Dutch with the highest standard of living in Europe in the 1600s
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November 8, 2007 (End of unit two) - Early Financial Panics...

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