An important factor of the crash of 1929 was the fact that the stock market was unregulated. The government did not intervene, and many large investors took this to their advantage. They ruled the market, and they used several techniques to maintain their control and increase their wealth. One such technique was "painting the tape." This involved several investors buying into a company, then trading the shares among themselves. Small investors would only see a stock on the ticker tape which was being heavily traded, and so they would be interested in buying. The large investors would then sell the stock for a profit. Similar to this was pooling, in which large investors would together buy a low-priced stock and sell it among themselves, artificially driving up the price. They would then sell the stocks for a profit. No longer did stock prices reflect a company's worth. In fact, some of the large investors, rather than buying a cheap stock, would invent one without a company behind it. These unethical practices emerged in the unregulated environment which was the stock market.
Even with these unethical practices, there was a confidence in the market. The belief existed that the market was near a state of perfection, that the sky was the limit, that the market could go nowhere but up. Everyone wanted a chance at the easy money the market offered. Many plain folk took their chances in the market. They "bought on a margin," meaning that they bought stocks with borrowed money. So long as the prices went up, they would be making money. But if the prices should go down, they could find themselves deep in debt. Never fearing this, they bought into the market.
This lack of fear would not last. There were those who saw the faults of the market, the cracks in the foundation, the writing on the wall. In 1929, their voices were heard. Some investors listened and began to sell. This was in September. This time, the market was able to be stabilized. However, by October 24, things were different. Many large investors feared that the market might bust. So they sold. And they sold. And people saw them selling. These people sold. This set off a chain reaction; everyone began selling out of fear, to save the money they had placed so much confidence in.
The crash of the stock market in 1929 changed the face of history in the United States. The unregulated nature was a major contributing factor in the crash. The overconfidence and greed of the 20s also contributed, as did the fear that emerged after the investors realized that the market was not invincible. All of these factors came together and the result was disaster: the stock market crash of 1929.