The market meltdowns

By Liaquat Ahamed

For the world’s bankers and financiers, it is not April that is the cruellest month, but September. For, this is the month when most financial crises hit and the world’s stock markets have their most serious tumbles. Why this should be so remains a mystery. During the 19th and 20th centuries, it was thought that the pattern could be caused by the crop seasons.…

This seasonal spike in crises has continued. A disproportionate number of panics — more than a half — occur during late August-September. Almost three-quarters take place sometime in the northern autumn.

Perhaps it has to do with the end of the vacation season: all those well-heeled bankers, returning to work; the Europeans back from their hallowed August vacations in Provence or the Côte d’Azur; Wall Streeters heading home from Nantucket or Sun Valley, Idaho, jolted back into reality.

Whatever the cause, this also happens to be the time of year when the IMF and the World Bank hold their joint annual meeting. So, as the annual meetings are about to begin, there always seems to be a sense of dread hanging in the air.

Will it be like 1976, when the British Chancellor of the Exchequer had to head off the collapse of the pound? Or 1979, when the US dollar went into free fall? Or 2008, when Lehman Brothers folded?



From “Money and Tough Love: On Tour with the IMF”