Any doubts over whether the world’s markets still move in lockstep with the United States’ were laid to rest yesterday when, on a day the domestic exchanges were silent, a near-global run took place almost everywhere else, spurred by fear of a looming U.S. recession.
Many markets saw losses of 5% or more, and several hadn’t seen drops like this since September 2001. In fact, Sri LankaÂ — Sri Lanka! — the Indian Ocean island nation whose annual GDP is worth about half the value of Bill Gates’ stock portfolio, was the only nation whose market rose Monday.
I suppose we can also put to rest the notion that Asia’s 4 billion-plus citizens have amassed the spending power to stabilize downturns in the U.S. Instead, it is clear America remains the world’s bellwether, and China, Taiwan, India, and yes, Europe, lean heavily — perhaps too heavily — on the backs on American companies and consumers to feather their nests.
Ironically, when we speak of globalization, the upside to jobs lost at home — the big hope — is the rest of the world’s economies will improve to the point of self-sustainability. We’re not there yet, not by a long shot.