One day it dropped 273 points. The next day it soared by 274. On the third day there was a 335 point collapse.The fourth day it tumbled 223 points.
I’m referring to the Dow Jones industrial average, the most important indicator of the health of the New York Stock Exchange, the largest in the World. There were similar declines elsewhere. In Greece, for example, the Athens Stock Exchanged slumped to close below the 1,000 mark.
What’s going on? Are these warning signs of a new global unrest or are they part of the occasional stock price volatility?
Probably a combination of both, I would say. But with greater emphasis on the first.
In my view, the deep crisis which started with the banks of the United States in 2007 was met -and is still being dealt with – selectively, but over all satisfactorily.
However, the subsequent debt crisis in Greece, which revealed serious structural problems facing the Eurozone, was never handled seriously. It was just covered up. That is why they run from crisis to crises.
The Government of the United States, and the independent Federal Reserve Bank in conjunction with the mindset of a hard working populace and the overall proper functioning of the bureaucracy cleansed the economy of many of the sins of the past.
However the country did not emerge un-wounded by the crisis. Quite the contrary: Its leadership image has dimmed and countries like China and Russia and emerging powers like Turkey have been testing the strength and determination of the United States
In the Eurozone, however, after delays and hesitations about what to do with Greece, the last minute all-night meetings and various have-measures that were adopted, there was an apparent calm but not a final solution to the problem.
Thus, the crisis spread to a number of countries.
Furthermore, the long-term crisis with stratospheric rates of unemployment seriously injured the dream represented by the project of European union for the people of the distressed continent.
Add to all this the geopolitical issues, like the unraveling of the Middle East the tensions in China-Japan relations and what you get is fear that results in the turbulence in the stock market.
These problems could have been addressed if it were not for the lack of robust international leadership.