A spike in the dollar has been a reliable signal of global panic
Are we due one?
THERE ARE two types of sellers in financial markets. The first kind sell because they want to. They may need cash to meet a contingency; or they might coolly judge that the risks of holding an asset are not matched by the prospective rewards. The second kind sell because they have to. The archetype is an investor who has borrowed to fund his purchase and has his loan called. If there are lots of forced sellers, as can happen in periods of stress, the result is a rout.
This article appeared in the Finance & economics section of the print edition under the headline “Involuntary code”
Finance & economics March 14th 2020
- Corporate bonds and loans are at the centre of a new financial scare
- No one is likely to win the oil-price war
- The challenge of addressing covid-19’s economic effects in Europe
- Entering a bear market
- Yes Bank’s rescue deepens worries about Indian finance
- A spike in the dollar has been a reliable signal of global panic
- Throughout history, pandemics have had profound economic effects
From the March 14th 2020 edition
Discover stories from this section and more in the list of contents
Explore the editionMore from Finance & economics
China meets its official growth target. Not everyone is convinced
For one thing, 2024 saw the second-weakest rise in nominal GDP since the 1970s
Ethiopia gets a stockmarket. Now it just needs some firms to list
The country is no longer the most populous without a bourse
Are big cities overrated?
New economic research suggests so
Why catastrophe bonds are failing to cover disaster damage
The innovative form of insurance is reaching its limits
“The Traitors”, a reality TV show, offers a useful economics lesson
It is a finite, sequential, incomplete information game
Will Donald Trump unleash Wall Street?
Bankers have plenty of reason to be hopeful