KOSPI · August 10, 2007
The day the crisis first arrived
-4.20%
single-day change vs previous close
Part of a longer stretch
The first subprime shock
near the end of it · 2007-07-25 → 2007-08-17, -18.27% over the whole period
What happened that day?
- The KOSPI fell 4.2% on the day
- The day before, a large French bank had blocked withdrawals from three of its funds, saying it could not price the US mortgage debt inside them
- Being unable to price it is the heart of the matter. With no price you cannot sell, and you do not know what to write in your books
- This event is generally taken as the formal start of the financial crisis — the day it was confirmed the problem had crossed from US housing into European banks
- Korea held almost none of that debt. It fell hard anyway, because money fleeing risk leaves emerging markets first
- The correction ran another week, and the rebound began when the Fed cut rates
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.