A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth.
Generally speaking, crashes usually occur under the following conditions:[1] a prolonged period of rising stock prices and excessive economic optimism....STOCKS HAVE BEEN RISING TO NEVER BEFORE LEVELS!
(2)a market where P/E ratios exceed long-term averages, CURRENTLY, ABOVE THE MEAN: http://www.multpl.com/
and (3)extensive use of margin debt and leverage by market participants....AS OF OCTOBER 31ST...IT, TOO, IS AT AN ALL TIME HIGH....http://www.hedgopia.com/margin-debt-stays-put-at-elevated-levels-october-may-look-different/
During severe financial crises, sometimes governments close banks. Depositors may be unable to withdraw their money for long periods, as was true in the United States in 1933 under the Emergency Banking Act. Withdrawals may be limited. Bank deposits may be involuntarily converted to government bonds or to a new currency of lesser value in foreign exchange.[7]
During financial crises and even less severe situations, capital controls are often imposed to restrict or prohibit transferring or personally taking money, securities or other valuables out of a country. To end hyperinflations a new currency is typically issued. The old currency is often not worth exchanging for new.
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