Stock market turbulence: don't panic!

Article by Carsten Klude

The sharp price losses on the global stock markets attracted a great deal of attention on Monday. Not a single newspaper or news program failed to comment on the turbulence on the capital markets. Headlines about a "crash" on the stock markets made the rounds. 

What had happened? In Japan, the Nikke index plummeted by 12.4 percent, the biggest daily loss since October 20, 1987, the day after the infamous "Black Monday" on Wall Street. There were also massive losses on other Asian stock exchanges, with Taiwan and South Korea down eight and nine percent respectively. Europe and the USA got off more lightly with price losses of mostly two to three percent, although the falls on the two previous days were similarly high.

What are the reasons for the price losses and what is the outlook for the future? We find out in the latest issue of "Economic Situation & Strategy".