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Greek Tragedy: Collapse Of The Athens Index!

  • Written by Syndicated Publisher 2 Comments2 Comments Comments
    May 18, 2012

    I just finished reading a couple of commentaries by familiar pundits at Project Syndicate on the ongoing disaster in Greece. PIMCO’s PMohamed El-Erian asks the rhetorical question Who is Responsible for the Greek Tragedy? Nouriel Roubini states unequivocally that Greece Must Exit the Eurozone.

    The latest Greek unemployment rate, through February, is at a record 21.7 percent and 54 percent in the 15-24 age group. The country, having failed to elect a government, has sworn in a caretaker technocratic cabinet to govern until new elections on June 17.

    Of the many grim facts about the situation in Greece, here is a snapshot of one of the ugliest. The Athens Stock Exchange General Index is a capitalization-weighted index of Greek stocks listed on the Athens Stock Exchange. As of today’s close, the index has fallen 89.94% from its all-time high at the end of October in 2007.

     

     

    To put this catastrophe into a larger historical context, here is an overlay of the Dow Crash of 1929 and the Crash of the Athens Index.

     

     

    The crash of the Dow was a bit faster, but on Tuesday of this week, the Athens Index exceeded the percentage drop of the Dow’s maximum decline. Today’s 3.41% selloff with elections a month off doesn’t bode well for the benchmark market index for the birthplace of democracy.

     

    Images: Flickr (licence attribution) 

    About The Author

    My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.

    My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.

    Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.

    Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.
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