One year has passed since the terrorist attacks that hit New York and the Pentagon. Although the war in Afghanistan ended rather quickly, the danger of terrorism lingers on, and the Bush Administration's policy of not ruling out pre-emptive attacks has fueled new tensions. The recent slump in stock markets worldwide is a reflection of these tensions.
Basically, money flees from risks. Behind the stock market declines are not just economic problems, but a wide variety of risk factors that are political, military, religious and ethnic in nature. There aren't enough risk takers, however -- sometimes none at all -- to support today's share prices.
I must point out it is the United States that is leading the market slump. In a globalized economy, the problems of one economy will quickly affect those of its neighbor one after the another, just like it did in the Asian crisis in 1997. At the same time, however, national borders do exist, and the impact from the same shock will differ according to each country.