Global Markets Snapshot: How Far We’ve Fallen

How Much Have The World Markets Lost In (Roughly) The Past Year?


Train wreck at Montparnasse Station, at Place ...Image via Wikipedia

…even though America is the source of the credit debacle that is ravaging the global financial system, many foreign markets — both developed and emerging — are faring much worse than Wall Street.

I tallied up how much some major and minor markets have fallen from their recent highs, most of which were reached in the second half of 2007.

Here’s a sampling (not meant to be all-inclusive):

Markets down more than 70%: Vietnam (-70.5%), Peru (-73.2%), Ireland (-73.4%), Russia (-73.9%), Iceland (-88.7%).

Markets down between 60% and 70%: Hong Kong (-60.1%), Poland (-62.6%), China (-69.8%).

Markets down between 50% and 60%: South Korea (-54.5%), Italy (-55.2%), Egypt (-56.9%), Brazil (-57.2%), Japan (-58.1%), Singapore (-58.2%), Turkey (-58.5%), India (-58.3%).

Markets down between 40% and 50%: Great Britain (-42.3%), Australia (-43.3%), US S&P 500 (-44.0%), Spain (-46.4%), Germany (-47.0%), Mexico (-48.3%)

As one commenter noted:

The DJIA can now be added to the list of markets that have lost between 40% – 50%. The Dow reached an all-time high of 14,164.53 on 9 October 2007. It closed today, 24 October 2008, at 8,378.95. (A 40% loss from the the all-time high of 14,164.53 would be 8,498.72).

Thanks to CalculatedRisk for pointing me at this. Those are some numbers to think about.

All Together, Now

We are all in some serious trouble, economically. This weekend, all over the world, people are re-assessing their strategies. A peculiar kind of panic is setting in, one which disguises itself as rational, prudent thought but is indeed, pure emotional reaction.

Our planet, all of us, have become globally reliant on each other. There is a complex web of trade around the world, and our lives actually depend on it working. For instance, we NEED that Pakistani registered ship to bring our Chinese made computer parts so that your mom at Dell has a job and can buy the food, which is mostly shipped in from around the world.

So how do you measure how well shipping is doing around the world? Well, glad you asked.

There is a thing called the Baltic Dry Index, which measures to some degree international trade of ‘dry’ goods. The chart of it from October 24th tells a mean story. Since June of this year, the index has lost 90% of its value. Most of that was a continuous plummet nearly straight down.

A commenter on a post over at InfectiousGreed is able to explain what’s happened so suddenly with the index:

…the issue with dry shipping is that the commerce was all based on letters of credit and now most of the parties simply can’t get that credit even though the demand for the freight commerce is still there. He claimed that there are currently a long list of sovereign nations that can’t even get letters for international commerce, and that the tendency to gauge the problem by focusing only on LIBOR was missing the real story.

If the shipping stops, everything stops. We’ve never been this interconnected before, this interdependently connected. When any of us fall, the chances are great that we will all fall.

I am Jon. Watch your step.

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