WhyItDropped

Nasdaq · November 30, 2011

The day six central banks moved together

+4.17%

single-day change vs previous close

Part of a longer stretch

Six months after Europe opened the taps

midway through · 2011-10-03 → 2012-03-26, +33.68% over the whole period

What happened that day?

  • The Nasdaq rose 4.17% on the day
  • Six central banks including the US, Europe and Japan agreed to supply dollars to European banks more cheaply
  • European banks being unable to obtain dollars in the market was the most urgent problem of this period. Blocked there, they end up selling assets at fire-sale prices
  • China also lowered the reserves its banks must hold that same day. It was read as coordinated rather than coincidental
  • Several countries acting on one day is a signal in itself, and is taken far more seriously than each acting alone
  • This too only bought time; the actual resolution came from the ECB president's remark the following summer

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.