January 05, 2008

http://static.seekingalpha.com/uploads/2008/12/26/saupload_screenhunter_1.jpg

The picture above shows a one year chart for United States Oil fund (USO), PowerShares Bullish US dollar index (UUP) and SPDR Trust (SPY). You can see there is an inverse correlation between the value of the US dollar and crude oil prices. The slide from record crude prices of $140 triggered the US dollar rebound. In the past few days, the Euro and other currencies are regaining ground against the US dollar, but crude oil is still heading down.

http://www.nytimes.com/interactive/2008/12/31/business/20081231_MARKETS.html

interactive graph

The Dow Jones Euro Stoxx 600 index, a measure of the broad European market, finished the year down 46 percent. The MSCI Asia-Pacific index fell 43 percent. United States stocks were not much better, with the Dow Jones industrial average falling 33.8 percent, its worst year since 1931, while the broader Standard & Poor’s 500-stock index fell 38.5 percent.

If the news from the developed world sounded bad, it was even worse for many emerging markets. The Shanghai composite index fell 65.4 percent, the Russian RTS index fell 72 percent and the Sensex 30 in Mumbai fell 52.4 percent.
Stocks lost 42 percent of their value in 2008, as calculated by the MSCI world index, erasing more than $29 trillion in value and all of the gains made since 2003. Just about the only assets to prosper were government bonds of developed countries and gold, where prices rose as investors ran for cover.

Looking for someplace comparatively safe? You would have needed the foresight to put your money into Bangladesh, where the main Dhaka stock index lost only 7.4 percent last year, or Venezuela, down the same amount.