Global share crash: stock markets in crisis?
Share prices the world over plummeted at the start of the week. The US's benchmark index the Dow Jones dipped by 3.1 percent at one point on Monday, and the German Dax index by 3.8 percent. Both have recovered slightly in the meantime. Commentators look for reasons for the uncertainty on the stock markets - and ask whether security is at all feasible.
Fear of interest rate hikes
The uncertainty can be explained by the central banks' upcoming interest rate decisions, La Stampa explains:
“Stock markets are trembling because they fear that central banks, especially the US Federal Reserve, will raise interest rates sooner and higher than expected. Such hikes are being considered because global recovery in 2022 won't be as robust as had been hoped, while the coronavirus is proving tougher than expected and has surprised us with the Omicron variant. The possibility of the brakes being pulled harder than expected on the circulation of money is becoming reality, because central banks consider a wave of inflation to be more damaging to the economy and society than a slowdown in growth which they hope they can control.”
The stock market is not for speculators
The stock markets were in need of a fundamental course correction, says De Standaard:
“Stock markets aren't there to make people rich without effort or the risk of losses. The fact that this is how things have seemed for a decade and a half is a historical anomaly that had to be corrected at some point. There were enough signals that things were getting out of hand. The ridiculous skyrocketing prices of the so-called cryptocurrencies is one of them. ... The popularity of virtual money has all the hallmarks of a Ponzi scheme. ... Only more realistic expectations can create a new equilibrium. This is a painful but inevitable - and necessary - process. ”