The following are the years that the big market crashes happened since 1900 in the US stock market including the most recent one.  
1929-1932
1987
2000-2002
2007-2009
2020

Please compare the 2020 market crash with the listed previous ones. What are the similarity and dissimilarities? (2 marks)

How 2008 Global financial crisis impacts on 2020 crisis (Hint: Volcker Rule)? (2 marks)

Regarding 2020 market crash, US investors are mostly institutional investors. How the homogeneity of their trading exacerbate the liquidity crisis in stock market? (2 marks)

Regarding 2020 market crash, Federal Reserve cuts rates and launches massive quantitative easing program, are they working? How do you comment on those actions? (2 marks)

Regarding 2020 market crash, what actions US Senate has taken, are they working and how do you comment on those actions? (2 marks)

U.S.Stock Market Crashes:
There has been no shortage of major U.S. stock market crashes -- all of which were followed by recoveries (although some took much longer to recover than others). Here's a snapshot.

1. The Stock Market Crash of 1929-1932.
The first major U.S. stock market crash was in October 1929, when the decade-long "Roaring 20s" economy ran out of steam. With commodities like homes and autos selling like hotcakes, speculators ran wild in the stock markets. In doing so, many investors became over-leveraged (i.e., they borrowed too much money to purchase stocks) and when the market bubble popped, those same investors couldn't meet their debt obligations, and slid into bankruptcy.
The toxic brew of inflated stock prices, high leverage, and borrowed money to buy securities would be a formula for more market busts in decades to come. In this instance, the stock market fell 12.82% on the fourth day of the crash (known as "Black Monday") and it took 12 years for the U.S. economy to recover from the Great Depression that spread after the market crash. Ironically, the second-world war was a huge factor in the nation's long-term recovery, as the country began to ramp up the manufacturing effort needed to win a global war Uncle Sam was fighting on two fronts.

2.The Stock Market Crash of 1987:
Known as "Black Monday the 2nd," the stock market crash of 1987 once again took place in October -- and has gained notoriety as the largest single-day market loss in U.S. history. This crash also had its fair share of speculators and highly-leveraged borrowers, but it added a new twist to the bubble-popping mix -- technology.
As highly-leveraged corporate takeovers and buyouts took center stage, and as companies leveraged questionable financing tools like junk bonds and margin accounts, share prices boomed leading up to Black Monday, October 19, 1987. On that day, the market turned on a dime and sellers began to dominate market trading. As more investors sold, more investors panicked and sold aggressively, as well. This cycle continued roiling through the trading day, as computer trading made it easier and faster to place sale orders.
When the smoke cleared, the stock market has lost 23% of its value and market gurus began taking the first steps to install circuit breakers into computer trading platforms that would literally allow market executives to "pull the plug" on trading, and give reeling stock markets a much-needed breather in future high-risk market trading days. Once the technology market stabilized, and more long-term success stories like Apple (AAPL) - Get Report , Microsoft (MSFT) - Get Report and Cisco (CSCO) - Get Report emerged, the stock market grew stronger and galloped off on another 12-year bull run.

3.The Stock Market Crash of 2000-2002

Some stock market crashes occur in lightning fashion, just like the stock market crash of 1987 which saw the market lose 23% in a single day of trading. Other crashes take longer, as losses stack up after repeated trading sessions. That was the case in the dot.com market collapse of 1999-to-2000. In this scenario, technology was again front and center, as investor interest in internet stocks boomed over the course of the 1990s, and as "new economy" companies like AOL, Pets.com, Webvan.com, GeoCities, and Globe.com saw share prices rise substantially.
Perhaps the poster child of all dot.com stocks, Globe.com was an initial public offering sensation, opening at $87 per share in first-day trading in 1998, although the original asking price was only $9 per share. Globe.com raised $28 million in its IPO and had a market cap of $842 million. Yet only two years later, Globe.com, like many dot.com companies, fell out of favor as investors fled highly-inflated tech stocks. Two years after its lights-out IPO, Globe.com was trading under $1 per share, and was soon delisted by Nasdaq. With investors furiously shedding technology stocks like Globe.com, the tech-oriented Nasdaq fell from 5,0000 in early 2001 to just 1,000 by 2002.

It only recovered after Wall Street began more accurately evaluating the real financial stability of high-tech companies -- as investors grew more discerning and more conservative about which stocks and funds they purchased.

4. The Stock Market Crash of 2008

Many Americans likely don't know just how close the U.S. financial sector came to collapsing during the stock market crash of 2008 and 2009, as Wall Street banks' high-risk trading practices nearly took down the greatest economy in the world.

The 2008 collapse was fueled by the widespread use of mortgage-backed securities, backed by the U.S. housing sector. These products -- which were sold by financial institutions to investors, pension funds and to banks -- declined in value as housing prices receded (a scenario that started in 2006). With fewer American homeowners able to meet their mortgage loan obligations, MBS values plummeted, sending financial institutions into bankruptcy. With investment risk in the stratosphere, investors were unwilling to provide much-needed liquidity in the nation's financial markets.

Soon, the U.S. Congress approved a massive government funding project that, while stabilizing the markets, also bailed out "too big to fail" banks. Additionally, the Federal Reserve bought up languishing mortgage securities and steered interest rates toward zero percent. The strategy largely worked, as the stock market, after two years of jitters, began climbing again in late 2009 -- and the economy began to recover, albeit at a glacial pace.

5.The Stock Market Crash of 2020
          Soon after trading began, a Level-1 trading curb was triggered on major US stock markets due to increased selling, leading to a 15-minute halt on trading.Level-1 circuit breaker is triggered with a fall of 7% on the S&P 500 Index. The trading halt occurred after the markets reached a drop of 7.2 percent within 15 minutes. The crash temporarily recovered after the Federal Reserve Bank of New York offered at least $1.5 trillion worth of short-term loans to banks for 12–13 March, but the market quickly resumed its decline soon after.The Dow fell 2,353 points,losing all of its gains from its lowest point in 2018.The drop surpassed Black Monday, which occurred just a few days before, to be the greatest single-day point drop ever.Together with the drops of 1,191 and 1,465 points on 27 February and 11 March, the four largest Dow daily losses up to Black Thursday were all linked to the COVID-19 pandemic.President Trump reacted to the crash by defending his travel ban and predicting that the stock market would eventually recover with central bank intervention.

Differences and Commonalities between the 2020 market crash and the five previous market crashes:

The Dow Jones has declined by about 28% between February 11 and March 12, 2020, driven by the Coronavirus pandemic and turmoil in the crude oil markets. While it’s difficult to say where this crisis could be headed, it would help to compare the current crisis with other historic stock market/economic crises – namely the Great Depression of 1929 (-89% decline), Black Monday of 1987 (-31%), the 2000s Recession (-34%), and the Great Recession of 2007-08 (-49%). We capture key trends in the Dow during and after major market crashes in our interactive dashboard analysis, ‘The Coronavirus Crash vs. Other Historic Market Crashes,‘ parts of which are summarized below.

The Great Depression was the most severe stock market crisis to date, with the Dow tanking 89% from its pre-crisis peak. The decline occurred over a period of about 34 months.The Great Recession saw the markets fall by 49% over a period of 16 months.In comparison, the Dow has fallen by about 28% over the Coronavirus crisis between February 11 and March 12, 2020.

The markets rallied by 158% thought the year preceding the crash of 1929 and by about 33% through the year before the Great Recession of 2009.In comparison, stocks rallied by less than 14% through the 12 months before the Coronavirus crisis.

The markets took about 25 years to recover to their pre-crisis peak after bottoming out during the Great Depression.In comparison, it took about 4 years after the Great Recession of 2007-08 and a similar amount of time after the 2000s crash.

How 2008 Global financial crisis impacts on 2020 crisis (Hint: Volcker Rule)?

The Volcker Rule prohibits banks from investing in their own accounts and in hedge funds and private equity funds. The objective of Volcker Rule was to prevent banks from making speculative investments which contributed to the 2008 financial crisis and thereby to protect bank customers.

In August of 2019, there was an attempt to amend the Volcker Rule and clarification was sought on what securities trading were not allowed by banks. On June 25, 2020, the restrictions from the Volcker Rule were loosened.? Then there were more streamlined set of requirements for the banks. This allowed banks to make large investments in private equity funds. The banks were not required to keep cash for derivatives trades. The loosening led to free up of billions of dollars in capital for the industry. This caused financial crisis in the year 2020.

Regarding 2020 market crash, US investors are mostly institutional investors. How the homogeneity of their trading exacerbate the liquidity crisis in stock market?

Liquidity, like many concepts in the investment world, is simple on the surface but becomes far more complex when one examines it more deeply. Essentially, liquidity refers to how quickly an investment can be turned into cash. Consider how we defined investment risk in our 2018 asset allocation publication, Confronting the Unknown: “The probability that a portfolio will not meet an investor’s needs.” To state the obvious, it is impossible for a portfolio to meet an investor’s needs without an effective conversion of investments to cash; one cannot pay for a house with fund documents or a holdings report.

Regarding 2020 market crash, Federal Reserve cuts rates and launches massive quantitative easing program, are they working? How do you comment on those actions?

The Federal Reserve, saying "the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States," cut interest rates to essentially zero on Sunday and launched a massive $700 billion quantitative easing program to shelter the economy from the effects of the virus. The new fed funds rate, used as a benchmark both for short-term lending for financial institutions and as a peg to many consumer rates, will now be targeted at 0% to 0.25% down from a previous target range of 1% to 1.25%.

Regarding 2020 market crash, what actions US Senate has taken, are they working and how do you comment on those actions?

The federal government is racing to ease the pain facing the U.S. economy as the coronavirus pandemic makes its swift pivot from public health crisis to financial catastrophe.
The damage from COVID-19, the disease caused by the new virus, is unlike anything in modern times. Economists have warned the fallout could dwarf the 2008 recession, the worst downturn that many Americans can remember. CNBC has compiled a list of steps taken by the federal government so far, counting actions taken by Congress and the executive branch, including the Federal Reserve, which operates independently from political officials.