One of the things I do is study history. Take a look what I've written. Probably over is either historical or it's made up of stuff taken directly from history. One of the many things that interests me is the Great Depression. I want to understand why, and how, it happened. Not only that I want to understand how people got through it all. A couple of the stories I've written are actually set in the time and there's a couple of post apocalyptic stories that are set in similar economic environments.
I've read this through a second time and I don't agree with everything in it though it does a good job of laying out many of the causes of the Great Depression. About the only thing they aren't mentioning is mortgage securities that were called in. They were very similar to those ones that AIG was producing in the 2000's. You take a bunch of mortgages, package them together, and turn them into a security.
Back when I was investing I had a tendency to shy away from them once I learned what they were made up of. Usually there was junk packaged in with really good securities. The junk was of course loans that were given to people who couldn't conceivably continue to pay on the note if their finances took a turn for the worst. I can't believe looking back some of the mortgages that were written. Closer to 1927-28 they were basically sub-prime garbage but National Bank, and several others didn't inform the investors what they were really investing in. Doesn't that sound familiar?
When people couldn't pay their mortgages the banks went after the securitizations which most of those investors couldn't cover the difference in value. Most of them ended up going bankrupt. BTW, roughly 18% of all houses were foreclosed on. We we lucky in 2007 since we didn't have protectionists in the Senate, House, and the Presidency.
As a result of the mortgage meltdown of 1929-32 a lot of people lost their homes. They had no place to go. The result was the Hooverville which was named after the President of the time. Mostly they were shanty towns and most towns didn't want them put on the front page of the paper. If you look elsewhere you'll see things written about the bonus Army. They lived in one of the shanty towns in Washington, D.C. They'd all lost their houses because they couldn't find jobs. This particular web site is pretty informative. http://depts.washington.edu/depress/hooverville.shtml
Hopefully you learned a lot today. I'm off to watch more of The Roosevelt's on PBS.