Warning signs were ignored from "summary" of The Great Crash 1929 by John Kenneth Galbraith
In the years leading up to the crash, many warning signs were present but were largely ignored by those in positions of power and influence. The prevailing sentiment among investors and policymakers was one of unwavering optimism and confidence in the market's ability to continue its meteoric rise indefinitely. One of the most glaring warning signs was the excessive speculation and leverage that had become rampant in the stock market. Margin buying, in which investors borrowed money to purchase stocks, had reached unprecedented levels. Despite the obvious risks associated with such practices, little was done to curb this dangerous behavior. Another warning sign that was overlooked was the increasingly unsustainable levels of corporate debt. Many companies had borrowed large sums of money to finance stock buybacks and other activities ai...
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