In the wake of the global credit crunch, stock exchanges throughout the world collapsed in tandem. Why?

1. All of them - from the mighty Wall Street to the puny Macedonian Stock Exchange - have come to depend on a regular and inexorable flow of foreign portfolio capital to sustain the bull market. When this influx of hot, speculative funds ceased and foreigners began to sell their holdings, the bubbles burst everywhere at once. (more…)