Performance of leading stock indices
Since their top in 2007-2008, leading stock markets indices around the World have significantly declined, making this five year period one of the worst performance ever. As the chart below shows, we can distinguish three groups: The worst performers are the South European indices: Greek (ATHEX), Italian (MIB) and Spanish (IBEX) indices are down over 59%, badly hit by the Euro crisis and subsequent double-dip recession. For those countries, their membership in the Eurozone is put in question, their financial systems are strained by a loss of confidence and large outflows of money. This financial sector stress is having a depressing effect on the real economy, through reduced loans to companies and dampened business confidence. The particularity of this group is that they are now trading at their lowest level since the 2007-2008 crisis because the second crisis (Euro crisis) is hitting them much more than the first crisis (sub-prime then global financial crisis). The second group is c