Highly contagious; World stockmarket contagion.(stockmarkets have plunged nearly everywhere, in seeming disregard of national economic prospects. Is there a new global virus in financial markets?)(Finance and Economics)

Economist (US), The, March, 2001

THE half-point cut in interest rates by America's Federal Reserve on March 20th was the third such cut this year. By past standards that counts as pretty aggressive monetary easing, but it does not seem to have satisfied stockmarket investors, who had hoped for a bigger cut. After the Fed's decision, Wall Street fell again, leaving the S&P 500 index down 27% from its peak last March. The Nasdaq has now lost more than 60% of its value. Moreover, the bears are out all over the world.

In the week before the Fed's rate cut, no fewer than 38 of the 40 stockmarkets tracked by The Economist fell. This week, 32 of them slid again. It is understandable that America's overvalued stockmarket should plunge once its economy started to slow. Likewise, the 35% fall in the...

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