Eleven years ago today world stock markets began to recover, several months after the collapse of Lehman Brothers brought the banking system to its knees. Today, stock markets are once again in free-fall as the coronavirus Covid-19 races round the world, bringing economic activity to a shuddering halt.
Events are moving at a pace that’s almost impossible to keep up with. In just a week, the number of affected countries has risen from 50 to 85, detected cases from 35,000 to over 110,000 and the death toll to 3,800 from less than 1,000.
It seems that now’s the time to lay in emergency supplies of dry pasta, tins of beans, long life milk, and of course plenty of toilet rolls.
This short blog will attempt to answer two questions – whether the market’s response to the unfolding situation has been appropriate in view of what we know and don’t know, and what the Covid-19 crisis might look like in retrospect, say in two years’ time.