A week ago, Japan was the world's third largest economy. It survived a major 9.0 earthquake and a horrific tsunami. The economic uncertainty sank in quickly, and world markets naturally sank as well. The Dow sank 51 points, which proved pleasantly resilient.
Since then, the radiation leaks in their 40-year-old nuclear reactors have demonstrated the potential to change a catastrophe into apocalypse. Overnight, the Japanese Prime Minister added more fear by warning that the wind was blowing radiation toward Tokyo. Their stock market dropped over 10% in one single day, absolutely horrific from a financial standpoint. The cost of reconstruction jumped from $35 billion to $122 billion in just one day. I'm confident it will rise much more. For comparison, their stock market has already lost $700 billion in market value.
Their stock market is down 17% in just two days, the worst two days since 1987. Right now, the U.S. futures indicate the Dow will open down about 230 points, yes, 230 points. It was down 283 earlier this morning. It feels like 2009, but it is not. A global financial crisis is much more frightening than an over-reaction to a natural disaster, even a horrific one like this.
