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Showing posts with the label global market

Global Stock Market Plunge and Minority Banks

According to the Washington Post, "Stock markets around the world plummeted today, as a financial crisis that began in the market for U.S. home mortgages spread to almost all corners of the global economy."

This challenges both theories concerning global equity market independence and equity portfolio risk management techniques that rely on global diversification to control risk. This is particularly troubling: there may be no safe haven for equity investors.

In 2006 and 2007, global economic activity was very strong. This was due, in part, to $458 billion dollars spent by the US, between 2003 and 2007, on the Iraq war. In an earlier age, stimulus of this magnitude would have all but guaranteed that the US would not fall into recession in 2008. To date, several factors have intervened:
The US has outsourced the Quartermaster function. Thus, critically important military support functions, including meal preparation and service, are now handled by foreign nationals. Economic st…