Major stock markets record the worst losses in their history
2008 will go down in history as the worst year ever for many banks. Not since the Great Depression of the 1930s have borse prices fallen so much. The Nikkei index stands out in this observation, even though it gained 1.3% in Tokyo on the last shortened trading day. The Nikkei closed the year on Wednesday at 8859 points, down 42%, the largest annual loss in its 58-year history. The loss was thus even more severe than in 1990, when it fell by almost 39 percent over the course of the year.
But the crisis emanating from the U.S. real estate market has left deep scars everywhere. The ATX on the Vienna Stock Exchange recorded its biggest fall in history, dropping by as much as 61 percent. The same is true for the Spanish benchmark index Ibex, which has lost a good 39% overall in Madrid, and for the Swiss Market Index (SMI), which reflects the performance of the twenty most important stocks in Switzerland, which has fallen 35. The financial crisis raged much worse on the Shanghai bourse, which lost 65 percent. In Russia, where the ruble has also lost considerable value (winner of the financial crisis: the euro), the RTS index went into free fall, dropping by as much as 73%, even though trading there was repeatedly suspended for days in order to stop the price decline.
Things did not look much better for the DAX in Frankfurt. Although it also gained another 2.2% on Tuesday, in total it plummeted by 40% over the year to 4.810 points a. But in Germany these are only the highest losses since 2002, when the DAX lost as much as 44%. Losses in France also drastic. The CAC 40 rebounded slightly at the turn of the year on Wednesday, but overall it posted a 42% loss for the year on the Paris bourse.
The losses were somewhat less severe in the UK, where the leading index rose slightly by 0.7% on Wednesday. In London, the FTSE 100 fell by a total of 31.5%, not quite as much as on other stock exchanges, but even this was the index’s deepest fall in its history. In New York, the Dow Jones index fell by about 35% year-on-year, which is also the biggest loss since 1931. The exact value can only be determined after the close of the stock exchange, because trading is still taking place in the USA.
In view of the Fed’s decision to buy up another 500 billion in bad securities, the Dow Jones Index has risen by just over 2% in trading so far. Once again, half a billion dollars are added to the $8 trillion in liabilities (secretly, the U.S. government wants to trim the financial system of nearly $8 trillion) that the state has taken on as part of bailout packages without being able to stabilize the economy with them so far.