KOSPI · August 17, 2007
The first subprime shock
-18.27%
peak-to-trough, the whole slide
16 trading days · 2007-07-25 → 2007-08-17
back to the old high on 2007-10-02
What happened that day?
- From the 25 July 2007 peak to the 17 August low the KOSPI fell 18.27% — 16 trading days
- It began with a run of announcements that funds holding US mortgage debt were suspending redemptions
- Nobody knew how big the losses were, and for the first time banks stopped lending to each other
- In a crisis investors clear out the riskiest holdings first, and emerging-market equities are in that group
- The KOSPI had risen steeply right up to that point, so the give-back was correspondingly large
- A Fed rate cut settled it for the moment. The old high returned on 2 October — but this was only the start of the crisis
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.