Remember that economic “soft-landing” that got reclassified as “moderate turbulance”? Perhaps mid-air explosion should be more appropriate…
US stock markets have fallen for six consecutive weeks, to their lowest levels in five years. European markets have collapsed even further, wiping out nearly half of the value of European corporations in this year alone. Japan is struggling to put together a plan to save its banking system, riddled with bad debt after a decade of recession and falling prices. Now the German economy threatens to follow.
‘There are strong parallels to the Thirties after an unsustainable “new era” boom,’ says Avinash Persaud managing director for economics and research at State Street Bank. ‘Then, the stock market decline was not just steep, it was long, taking three years to reach the bottom.’