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While certainly the banks allowing borrowing on the margin with very little "down" was a contributing factor was it not the greed of the investors to actually take out the loans without enough money to cover the margin when the stocks lost value the real problem? Had they borrowed money to buy stocks with only 50% of the value borrowed instead of the 90% that was allowed there would have been no panic selling.
Of course the market crash of '29 only initiated the Great Depression and then it was exacerbated by government actions and the dust bowl extended it until WW II. Sort of like we are seeing now with the mortgage problems. We would probably be better off it the federal government simply let the mortgage companies take their losses.
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