Are capital markets on the verge of collapse again?

International analysts have been watching the trend of the Dow Jones Industrial Average index, the best-known index in the world, over time and have noticed an outstanding similitude between the index’ trend of the past two years and the one registered at the onset of the US Great Depression of 1929-1932. Some international analysts are afraid the history will repeat itself and the US market will continue to drop several times over the following years, as it happened during the 1930-1932 period. The outlook is frightening investors across the entire world as European and Asian capital markets are strongly correlated to the US ones, and a long-lasting downward trend would wipe out hundreds or even thousands of billions from investors’ portfolios and would deepen the global economic downturn. Since the crisis onset, in the summer of 2007, the Bucharest Stock Exchange has been tightly in sync with the US market, but BSE indexes’ up and down movements have been broader. “There are chances that the lows of March 2009 to be retested, but at present it’s hard to assess the likelihood of such an event (…),” says Dragos Darabut, analyst with Tradeville brokerage.