Some shock, horror numbers from global stocks
Some mind-boggling numbers from the MSCI all-country world stock index, which is one of the broadest measures of how equity markets are doing and is a benchmark for many institutional investors. The index has some 2,500 companies in it from 48 developed and emerging economies.
First off, it has lost around $15 trillion in value since the end of October last year (graph below). That is more than 21 times the $700 billion U.S. bank rescue plan. It also more than the annual gross domestic product of the United States. It is more than three time Japan’s annual output and more than four times that of Germany.
Secondly, the speed with which this fall has taken place has been breathtaking by investment standards. It took companies that make up the index about four years to gain the $15 trillion in share value before hitting an all-time peak last November. About a third of the losses since hitting that peak came in a free fall from mid-September to mid-October this year.
So are there any positive numbers to play with? It is small beer, but the index did rise 3.6 percent last week, its largest gain since April and second largest since August 2007. It was also up on Monday, at least at the time that this was posted. A week is a long time in financial markets as well as politics, but if the index manages to end this week in the black as well, it will be the first time since spring that it has had back-to-back positive weeks. Great oaks out of little acorns grow — even if the forest has been burned to the ground.