Brian Chappatta, Columnist

Markets Are in Crisis, Not the Financial System

U.S. stocks are having their worst week since 2008. But that’s where the comparisons end.

February 28, 2020 at 5:57 PM UTC

Updated on

February 28, 2020 at 7:43 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Don't worry, this isn't a replay of 2008.
Photographer: Johannes Eisele/AFP/Getty Images

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Financial-market volatility is painful. From mom-and-pop investors suddenly seeing red in their 401(k) plans to large institutions scrambling to hedge their gigantic portfolios, this past week has been record-setting in any number of ways. The one example that’s bound to be repeated often: The S&P 500 Index plunged the most since 2008.

Minds tend to wander in the same direction when hearing that particular year. So let me just say this right now: There’s virtually no evidence that the world is veering toward another financial crisis. The rapid decline in Treasury yields and the fastest correction ever in stocks is, at least as of now, purely a market-driven phenomenon. That’s bound to strain some mutual funds, no question. Maybe some hedge funds, too. But it’s hardly apocalyptic.