Subprime meltdown behind worst stock market slide since 2001-2002

0 Comments | AFP, August, 2008

PARIS (AFP) — The collapse of the subprime mortgage market in the United States and the subsequent global financial crisis has provoked the sharpest fall on world stock markets since the end of the Internet bubble in 2001-2002.

In the last year, leading indices have lost between 12 and 25 percent of their value.

The sharpest plunge has been in Tokyo, 23.6 percent, followed by Paris, 20.7 percent, the Dow Jones Industrial Average in New York, 14.8 percent, the US Standard and Poor's 500 index, 13.6 percent, Frankfurt, 12.2 percent, and London, 12.1 percent.

Investor jitters regarding the health of securities backed by risky US home mortgages have weighed heavily on the financial sector. Major banks have announced big losses and asset writedowns while others...