2008 Global Meltdown: From Financial Markets To The Real Economy

The OECD recently published its global composite leading indicators (CLI) for major OECD nations and non OECD nations.

Below is the graphical depiction of the CLIs signifying the synchronized economic collapse in 2008....(charts from OECD)

Of course, all these economic indicators matches the actions in the financial markets…

Global equities (DJW), the Baltic Index (BDI) a barometer of global shipping rates and commodity prices (CRB) almost simultaneously a swan dive…

As the US dollar managed to surge…

The chronology of the above events from our perspective:

1. Building pressures of a financial collapse eventually found a release valve despite policies thrown to avert these.

2. The ensuing global financial markets meltdown led to a seizure in operations of the global banking sector.

3. The financial paralysis, which summed to shortage of available and accessible US dollars as the liquidation process snowballed, spurred the skyrocketing of the US dollar’s exchange value.

4. Lacking access to credit, Trade finance froze!

5. The banking sector’s inaccessibility and dearth of liquidity compounded crumbling assets led to the abrupt curtailment of orders across producers.

6. Reeling from the aftershocks of the seizure of the global banking sector, the real economy suffered from a spillover.