The pandemic is worsening mental health for women, middle-aged adults, a new survey finds

Mental health disorders like depression are rising among certain groups during the COVID-19 pandemic.
Throughout the pandemic, multiple surveys and studies have indicated that mental health has declined for a number of groups and populations.

  • Mental health challenges have been on the rise during the COVID-19 pandemic.
  • A new survey from the University of Michigan has quantified some of the effects.
  • Women and US adults ages 50 to 64 have reported worsening mental health during the pandemic.
  • See more stories on Insider’s business page.

For months, experts have warned about the prospect of a an entirely different threat unleashed by the coronavirus: a mental health crisis that could sweep the country.

Their concerns are rooted in more than a year of social isolation, the grief and loss, and economic and emotional trauma that the pandemic has inflicted. A new survey conducted by researchers at the University of Michigan is shedding light on which groups might be most vulnerable to the effects.

Four groups – women, people ages 50 to 64, people with higher levels of education, and individuals in either fair or poor physical health – “are more likely to have experienced worsened mental health during the first nine months of the pandemic,” or to have felt heightened anxiety or sleep problems, researchers found.

As many as one-fifth of all older adults said they felt their mental health had worsened throughout the health crisis, the findings concluded.

Women were found to be likelier than men to have broached the topic with a health provider or considered medication as a treatment option. The research was conducted by surveying more than 2,000 adults across the US in late January in the National Poll on Health Aging.

Based on the poll’s findings, which were published in the Journal of General Internal Medicine, the University of Michigan researchers now suggest that health providers look more closely at older adults to spot signs of worsening mental health, they said this week in a blog post on the university’s website.

Stepping up treatment offerings

“We need to continue to look for and address the mental health effects of the pandemic and connect people to treatment resources,” Lauren Gerlach, a doctor and assistant professor at the university’s medical school who was the primary author of the newly-published paper, said in a statement.

“Poor mental health can decrease functioning, independence, and quality of life for older adults but treatment can significantly help,” she added.

There were some bright spots for certain groups who participated in the poll. People ages 65 to 80 were less likely to report declining mental health, the university said, and, overall, two-thirds of respondents viewed their mental health as being “excellent or very good.”

Nearly a third added that they’d taken steps to “improve their mental health” since the pandemic began, like increasing exercise, diet, and meditation.

Other warning signs are emerging

Meanwhile, other research has alluded to the dangers of a looming mental health crisis brought on by COVID-19.

Roughly 40% of US adults have professed to feeling the symptoms of an anxiety or depressive disorder – about four times higher than those who felt similarly in 2019, prior to the pandemic, the Kaiser Family Foundation said in February.

As early as May 2020, the World Health Organization sounded the alarm over the potential for “a massive increase in mental health conditions in the coming months.”

In that warning, which called for increased investments in mental health services, the WHO reported that women were especially at risk of declining mental health, while balancing demands like childcare and home-schooling.

And Insider reported in June that mental health and substance use experts are concerned that this tumultuous year might also have intensified the consumption of alcohol among underage youth.

Read the original article on Business Insider

A $299-a-month app gave me access to a therapist and psychiatrist to fight pandemic burnout. Here’s what it was like to get help through my phone.

mental health millennial
  • Freelancer Julie Peck felt herself slipping into pandemic-induced burnout, so she sought help.
  • She chose Brightside, an app by a former 23andMe executive that combines psychiatry with therapy.
  • Although she was able to easily get medication that worked, the service had its downsides.
  • See more stories on Insider’s business page.

Back in May, I started noticing I was having some issues. I have highly managed bipolar disorder, so I’m no stranger to “issues” – but this was clearly different.

At first, I had trouble completing assignments for work. Then, I lost interest in my favorite Netflix binges and found myself rereading the same paragraphs over and over again in books.

I wanted to see people. I was exhausted all the time and often stared out the window, longing for a change of scenery.

It was easy enough to diagnose: The pandemic-related burnout that had affected 75% of employed people had landed on my doorstep.

The effects of this situation were different from the average depressive episode: My near-constant consumption of COVID-19-related news was clearly bogging me down, as was my irritation related to how my community was handling its response to the pandemic.

These were new and unusual factors and far beyond my control. Now they were affecting my work, my personal well-being, and my relationships with my loved ones.

Read more: I paid $150 to try the popular weight-loss app backed by investors like Tony Xu and Scooter Braun. It taught me better eating habits, but keeping the weight off was harder than expected.

I needed help, and with my busy schedule, I decided to take advantage of one of the many online services available to work at shaking my dark feelings.

If there’s one good thing to come out of the pandemic, it’s the proliferation of options available for mental healthcare online, although access to care for marginalized communities and those who can’t afford to pay for it still lags behind.

After evaluating the surplus of offerings available, I elected to go with Brightside

Brad Kittredge, a former 23andMe executive, told the San Francisco Business Times that he founded Brightside Health in 2017 after witnessing his father’s battle with depression and wondering why the US healthcare system wasn’t more helpful.

screenshot of the Brightside app
The Brightside options to message your provider.

Kittredge got together with Mimi Winsberg, a former in-house psychiatrist at Facebook and now Brightside’s chief marketing officer, who created the basic tool that later became one of the backbones of the Brightside experience.

The company’s stated commitment is to deliver the kind of care it’d want its family members to have, and as of May, the company has secured more than $31 million in funding toward this goal, including a $24 million Series A round from ACME Capital.

For me, the main selling point was its offer to combine psychiatry with therapy

I’ve been in treatment for mental-health issues since the 1990s, so I’ve seen quite a few of these apps. It never really seems like they have a good, coherent grasp on the need to integrate psychiatry with therapy (but then again, neither does the outside world). It appeared that Brightside might be working toward a truly integrated approach, which is why I decided to give it a try.

The app matches you with a medical doctor, who will assess the need for prescription medication, as well as a therapist to develop a “personalized treatment plan.” You can choose a medication-only subscription plan, a therapy-only plan, or a plan that includes both, and charges are as low as $45 per month.

screenshot of the Brightside app
The Brightside interface.

I chose a subscription plan that blended both medication and therapy for $299 per month, with the first month discounted to $199. I’m now in my third month with the service.

One terrific value of this service that’s embedded within it and very well hidden is that all medications prescribed by its providers are $15 – and believe me, for some mental-health-related medications, that could represent a significant savings. Just one of the medications I take is $300 a month without using the GoodRx card.

Also, while I sought treatment for pandemic burnout, Brightside boasts that it treats anxiety and depression in a “full spectrum of related conditions” ranging from panic disorder and post-traumatic stress disorder to postpartum depression and premenstrual dysphoric disorder. Some online services won’t accept those with diagnoses of bipolar disorder or post-traumatic stress disorder, for reasons of which I am unsure.

After signing up, I went through a lengthy intake questionnaire that assessed my personal health and my mental-health background, and what I was looking to achieve

The questionnaire asked for general information such as my height and weight, as well as for mental-health-specific information such as what medications I was taking and what treatment modalities I’d tried before. It concluded by asking for specific outcomes I’d like to get from my treatment.

The algorithm then gave me a score on both my depression and anxiety, and those scores were displayed on my homepage, along with my medication and therapy assignment. The score doesn’t appear to be standardized to the DSM-5, just the company’s own particular scoring system that gives it the ability to track your progress. From the user’s side, having everything on one dashboard is convenient.

Based on the questionnaire, I was matched with a psychiatrist and a licensed clinical social worker, both of whom were licensed to practice in my state.

My appointment to see the doctor was within 36 hours of the time that I signed up for the service

My appointment with the therapist was within 48 hours. I was pleased with this response time and hopeful about getting some relief.

screenshot of the Brightside app
Julie Peck’s path on Brightside.

When I met with the doctor, he was understanding about my situation and demonstrated a knowledge of the extensive information I’d already entered into my chart through Brightside’s intake questionnaire.

He went through the medications I’d entered into my questionnaire to ensure that he fully understood what I was already taking and asked my opinion about how each was working. He was warm and personable, and he empathized with me about the feelings I was experiencing.

He asked me how I would feel about him prescribing a medication that I had taken once before, to add to my medication routine. I told him I’d be happy to try it.

I decided to have the prescription filled at the CVS down the street from me, as opposed to having it filled via Brightside’s mail-delivery pharmacy, and that was the end of our interaction.

Since we spoke in the evening, I was able to pick up my prescription the next morning. For some reason, I was a little suspicious about whether the prescription would actually be at the pharmacy, but I picked it up without any hitches.

I talked with the therapist via Zoom

She listened to me discuss my symptoms and what I wanted to get out of therapy. She also let me know that Brightside’s methods are based on cognitive behavioral therapy, and she outlined the therapeutic program, which is structured around 10 interactive lessons, a self-guided, computer-based program that you progress through at your own pace.

At the end of our session, she told me that our next meetup would be in a month, which was a surprise to me. I’d previously read “unlimited access to caring providers” on Brightside’s homepage, and I envisioned that I’d more or less have an always-on Zoom connection with my therapist – not so, I was learning.

To be fair, the text messaging with my therapist was, in fact, pretty much always on. And it doesn’t say anywhere on the Brightside site that you’ll be able to contact your Brightside providers via video chat whenever you feel like it.

But be forewarned that the service is self-directed – which is, incidentally, in line with the price – so if you’re looking for something to deliver more of an up-close-and-personal experience, this isn’t it.

I think technology is the way of the future when it comes to delivering mental healthcare. It cuts through barriers of cost and accessibility. But in a lot of ways, we’re just not there yet.

As a case in point, I got a note from my therapist shortly before billing was to go out for the second month of my subscription to Brightside that she would no longer be with the service. It was a lovely note, but this is a red flag for me: As with choosing a hairdresser, you don’t want to chair-hop from therapist to therapist, even if it’s online.

Subscribing to Brightside was definitely worth it to snap me out of my burnout for the psychiatrist appointment alone

The appointment was quick and easy, and it produced a prescription that has been successful in providing relief.

Whether I’ll continue with the subscription for the medication management alone or discontinue it and leave that function to my primary-care provider remains to be seen.

Read the original article on Business Insider

How COVID-19’s effect on the job market could cause widespread health problems

Unemployment benefits line
Out-of-work Kentucky residents wait outside the Kentucky Career Center for help with their unemployment claims.

  • COVID-19 caused a surge in unemployment, and job loss can lead to physical and mental health issues.
  • Increased use of alcohol or drugs, eating and sleeping poorly, or exercising less are other risks.
  • Support for people out of work due to COVID-19 will be necessary to mitigate future health issues.
  • See more stories on Insider’s business page.

Being out of work isn’t bad just for your finances: It’s bad for your health. Losing a job can cause depression, anxiety and other mental health problems. Research also consistently shows that job loss and unemployment – even just for a few months – are associated with poorer physical health as well, including increased risks for cardiovascular disease, hospitalization and death. These risks can endure for years or even decades after a person returns to work.

As researchers who study the health effects of job loss and unemployment, we see many reasons to worry that the next wave of health problems linked to COVID-19 will not come directly from the virus itself, or the strain it places on health systems, but from its effect on the labor market.

During the first six months of the COVID-19 pandemic, 25% of US adults said they or someone in their household lost their job because of the pandemic. Among those who said they lost a job, half reported they were still unemployed six months later. Racial and ethnic minorities have been hit hardest by pandemic-driven job losses and deaths. These communities already face long-standing structural inequities in living and working conditions that affect their job prospects and may shape their financial recovery.

Read more: Former Disney employees reveal how they’ve turned their unique talents into sustainable businesses – with the help of a Facebook group

The health impacts of job loss

It’s not hard to see why losing a job, followed by a period of unemployment, can be bad for a person’s health. The initial months following a job loss can reduce social support by straining people’s finances and psychological well-being and limiting their social interactions. People who lose their health insurance along with their job may not seek medical attention when illness arises. The stresses caused by losing a job can also lead people to increase the use of alcohol or drugs, eat poorly, exercise less or develop bad sleep patterns.

These risks persist even if someone receives unemployment benefits or gets another job relatively quickly. Some research shows a few months of unemployment may be associated with worse long-term health and well-being. One study found that in the year after the participants lost their jobs, death rates among them were as much as two times higher regardless of whether and when they got a new one, and remained 10% to 15% higher than expected for the next 20 years. If this rate of increased risk continued indefinitely, the authors noted, losing a job at age 40 could reduce life expectancy by one to one and a half years.

Other research has associated job loss with a higher risk of conditions including hypertension and arthritis, and a twofold higher risk of heart attack and stroke. And that’s not because people in poor health are more likely to lose their jobs. Our 2007 analysis showed that even after removing the influence of baseline health and social background, people who lost their jobs were still more likely to report poor health.

Why pandemic-driven job loss may be the next health crisis

While some of the data on which we base our concern come from other economic recessions and downturns, such as the Great Recession from 2007 to 2009, we expect that there could be even worse outcomes in the wake of COVID-19. The peak unemployment rate during the Great Recession was 10%, while the peak unemployment rate in 2020 was almost 15%. Economic recovery is more precarious when pandemic restrictions are still in place, and some business operations have changed permanently, making it harder for some laid-off workers to regain their old jobs.

Moreover, many of those who became seriously ill with COVID-19 are experiencing slow recoveries. They may not be able to work at their earlier capacities for some time. Other adults may need to take on new caregiver responsibilities because kin have remained ill, or died and left behind others who need care.

What can governments do?

Already, preliminary analyses are emerging about the potential health effects of COVID-19-related unemployment, particularly among vulnerable populations. In a recent New Zealand study, the researchers estimate that pandemic-related job loss could cause a 1% rise in overall cardiovascular disease rates for each additional 1% increase in unemployment. Among the nation’s more vulnerable Indigenous Māori population, however, the disease rate rose to 4% for each 1% increase in unemployment. The authors’ model also suggests that the health effects of pandemic unemployment will persist over the next two decades.

This suggests the need for more robust support for people who are out of work, including continued health insurance coverage, to help buffer the economic toll of job loss and thereby mitigate some of its health consequences. The US has some threads of a social safety net, such as up to 26 weeks of unemployment benefits in most states, and Congress created extra pandemic help when it passed the CARES Act in 2020. But these weren’t enough to prevent a huge increase in food insecurity and use of food pantries last year.

Given the potentially long-term negative effects of job loss on health, one way to protect workers may be helping companies to not lay them off. Policymakers should continue to direct resources toward employers that keep businesses going and workers employed. If layoffs are inevitable, then create incentives to rehire laid-off workers as soon as possible. In California, for instance, Gov. Gavin Newsom signed a bill in April requiring companies in hard-hit industries such as hotel and event management to rehire workers who were laid off during the pandemic when jobs become available.

To address all the health consequences of the pandemic, we believe one must think broadly about interventions and policies. We must recognize the wide scope of job losses across households and industries, not just in workplaces making media headlines, and the unequal burden felt by workers already disadvantaged before COVID-19. The real solution lies in not just getting back to work, but getting Americans into secure jobs that pay a living wage and allow economic recovery alongside the healing of people and health care systems.

This article was produced in collaboration with Knowable Magazine, a digital publication covering science and its emerging frontiers.

Jennie E. Brand, professor of sociology and statistics, University of California, Los Angeles and Sarah A. Burgard, professor of sociology, University of Michigan

The Conversation
Read the original article on Business Insider

How magic shrooms affect your brain

Following is a transcript of the video.

Narrator: This is the map of a typical human brain, and this is the map of a brain on psilocybin, the psychoactive compound in magic mushrooms. All those new connections you can see don’t just make people trip. They’re also the reason that psilocybin is one of today’s most talked-about drugs in certain medical circles. Worldwide, more than 180 species of mushrooms produce psilocybin, likely as a defense strategy. Scientists believe that psilocybin may dampen the appetite of predatory insects like ants so that they feel full long before eating their way through the entire mushroom. Humans, on the other hand, well, they trip.

Johnson: Psilocybin is a so-called classic psychedelic, so it’s in the same category as drugs like LSD and works in the brain in basically the same way.

Narrator: When you take psilocybin, your gut converts it into another chemical, known as psilocin, which binds to serotonin receptors called 2A, and experts think that’s what triggers what they call neuronal avalanching. It’s essentially a domino effect of different changes in the brain. You’ve got increased activity in the visual cortex, which leads to changes in your perception, and then decreased network activity in the default mode network, which leads to a loss of ego.

Johnson: And that may be why people often report at high doses a profound sense of unity, transcending beyond themselves.

Narrator: But perhaps most importantly, psilocybin increases connectivity among different regions of the brain.

Johnson: Because of that receptor activation, there is a profound change in the way that different areas of the brain synchronize with each other.

Narrator: Think of it like an orchestra. Normally, the brain has different musical groups that each play independently.

Johnson: A sextet there, here’s a quartet there. This one’s playing jazz. This one’s classical, and a number of other ones.

Narrator: But once psilocybin enters, it’s like you suddenly have a conductor.

Johnson: So there is this communication between areas that are normally kind of compartmentalized and doing their own thing.

Narrator: Scientists believe that it’s a combination of these effects that make psilocybin so useful for combating depression and addiction. When new areas in the brain start talking to each other, for example, you might have new insights into old problems. And that’s why some experts describe tripping as a condensed version of talk therapy. And then dissolving your ego, Johnson says…

Johnson: Can be profoundly healing.

Narrator: And there’s actually an increasing amount of research to prove it. In two studies published in 2016, researchers gave cancer patients with depression a large dose of psilocybin, and even six months later, at least 80% of them showed significant decreases in depressed mood. And research on addiction is equally promising. In a study led by Johnson, 15 volunteers took psilocybin to quit smoking, and after six months, 80% of them had kicked the habit, compared to a rate of about 35% for the drug varenicline, which is widely considered the best smoking-cessation drug out there. Yet despite these results, psilocybin is still listed as a Schedule I drug, a category reserved for compounds that have no currently accepted medical use and a high potential for abuse. Now, taking magic mushrooms recreationally does come with some risks.

Johnson: So a dramatic example would be driving under the influence of psilocybin or using it in a way that interferes with your job, or your family relations, or your schoolwork, for example.

Narrator: But as far as scientists know, long-term use doesn’t damage the brain in the way that other drugs can, and according to at least one study, it’s actually the safest drug out there. In 2018, for example, just 0.3% of people who reported taking them needed medical emergency treatment, compared to 0.9% for ecstasy and 1.3% for alcohol. Taken altogether, that’s why some states across the country have campaigned to decriminalize psilocybin, including Denver, which, in May of 2019, became the first ever to succeed.

EDITOR’S NOTE: This video was originally published in May 2019.

Read the original article on Business Insider

A landmark study shows the main compound in magic mushrooms could rival a leading depression drug

Psilocybin in pill form
Psilocybin in pill form

  • Imperial College London scientists just published a report on how psychedelics could treat depression.
  • The study pits psilocybin, the active compound in magic mushrooms, against the depression drug escitalopram.
  • Reduction in depression occurred more quickly with psilocybin, but the differences were not significant.
  • See more stories on Insider’s business page.

In recent years, research into the use of psychedelics for the treatment of mental-health illnesses has begun to thrive.

Private companies focused on developing psychedelics-based medications for approval by the US Food and Drug Administration have raised hundreds of millions of dollars over the past year and several have gone public, garnering valuations of more than $1 billion.

Meanwhile, half a dozen prestigious universities in the US and Europe have established centers dedicated to research on psychedelics, a trend fueled by wealthy donors interested in the potential medical benefits of the substances.

But medical research into these mind-altering compounds is still nascent. Psychedelic research was virtually barred for decades and most academic institutions have only recently restarted studies testing psychedelic compounds in people.

That research is beginning to deliver results. On Wednesday, scientists published a milestone report that directly compares psilocybin, the active compound found in magic mushrooms, with the depression drug Lexapro, or escitalopram.

A compound found in magic mushrooms works as well as a major depression pill

The study, in the prestigious New England Journal of Medicine, shows that psilocybin works about as well as escitalopram to treat patients with moderate or severe major depressive disorder.

Dr. Robin Carhart-Harris, head of the Centre for Psychedelic Research at Imperial College London, led the research team.

He told Insider that while he believes the findings support the potential of psilocybin to be an improvement on current antidepressants, they are also a reality check on what he called “a kind of unbridled optimism about psychedelic therapy” driven by for-profit psychedelics companies and investors.

He added that the findings in the report are consistent with previous studies on the effectiveness of psilocybin as a depression treatment.

Dr. Robin Cahart Harris, head of the Centre for Psychedelic Research at Imperial College London
Dr. Robin Carhart-Harris, head of the Centre for Psychedelic Research at Imperial College London

The mid-stage trial was small, with just 59 participants, limiting scientists’ ability to draw strong conclusions. About half the volunteers were treated with psilocybin and the other half received escitalopram. All patients received psychological support throughout the trial.

Researchers found that although the reduction in depression occurred more quickly and in “greater magnitude” with psilocybin, the differences between the two treatments was not significant.

“Larger and longer trials are needed to compare psilocybin with established treatments for depression,” the article said.

Companies like Compass Pathways, which is the furthest along in testing psilocybin in clinical trials in the for-profit world, have focused on psilocybin as a treatment for treatment-resistant depression (TRD), or depression that hasn’t improved with at least two forms of treatment.

Psilodep psychedelic research at Imperial College London
Psychedelic research at Imperial College London

Psilocybin could take a slice of a $100 billion market

Imperial’s study works to provide the academic foundation to show psilocybin’s effects on more moderate forms of depression.

“What’s on the table now is the prospect that psilocybin therapy could be an alternative to SSRIs, if it’s at least as good,” Carhart-Harris said. “What we’re showing is that people could consider psilocybin therapy earlier on in the course of a depression.”

Psilocybin has in recent years been seen as a potential disruptor to the market for depression treatments. Current treatment options don’t work for some patients and can take a long time to fully work. Canaccord Genuity has estimated that psychedelic-based medicines focused on mental health could take part in what could soon become a $100 billion market.

Psilocybe cyanescens, a species of psychedelic mushrooms
Psilocybe cyanescens, a species of psychedelic mushrooms

Carhart-Harris said that the results of the study are framed in a conservative way in the journal, but he emphasized that they’re impressive. He pointed to some of the study’s secondary findings, such as the fact that about 57% of patients who received psilocybin saw their depression go into remission, while that occurred in about a quarter of patients who received escitalopram.

“To say it in a conservative way, psilocybin therapy looks at least as good as the leading treatments for depression,” Carhart-Harris said. “What you see in the paper is a very conservative framing but when you look a little bit closer under the hood, you realize it’s pretty impressive findings.”

If the trial were longer, researchers say patients who received escitalopram may have seen better efficacy

Escitalopram takes several weeks to show its full effect and the researcher note in the article that if the trial had been longer than six weeks, patients who received escitalopram may have done better.

Carhart-Harris said the fact that psilocybin seems to work faster than existing depression drugs could be a noteworthy benefit of the psychedelic.

“We’ve become so accustomed to this principle that you have to wait a couple of months for your SSRI to work and that’s not good enough,” he said. “Many people with depression are seriously considering taking their own lives and you tell them you have to wait two months to see any improvements. It’s not a great message yet we’re just accepting that.”

Magic mushrooms psychedelic psilocybin
Psilocybin mushrooms

Scientists say that more and bigger trials are needed

The next logical step for psilocybin for depression research is a late-stage trial involving more people. Carhart-Harris says that this is where for-profit and nonprofit entities step up to the plate.

Compass Pathways and the Usona Institute, a non-profit focused on psychedelic research, are furthest along in clinical trials of the compound. Both are in phase II trials, which involves testing the treatment in up to several hundred patients.

A smattering of other psychedelics companies are also in pre-clinical or early stage research around psilocybin

Different political initiatives – like Measure 109 in Oregon, which created a regulated therapeutic psilocybin program – also provide a route to providing psilocybin therapy to patients with depression. This offers an alternative to seeking approval from the FDA.

Read the original article on Business Insider

From the COVID-19 panic to the Dutch Tulip mania in 1637, here are 10 of the worst stock market crashes in history

market crash
CHICAGO – SEPTEMBER 29: Jeff Linforth stands at the Chicago Board of Trade signal offers in the Standard & Poors stock index futures pit near the open of trading September 29, 2008 in Chicago, Illinois. Stocks fell at the open as traders waited for Congress to vote on the $700 billion plan to rescue troubled financial companies. (Photo by Scott Olson/Getty Images)

  • For as long as there have been financial markets, there have been market crashes.
  • The March 2020 market crash – driven by the rapid spread of coronavirus around the world – is just the latest in a long line of panics over hundreds of centuries.
  • From the infamous Tulip Panic of the 17th century, to the 2008 financial crisis, Markets Insider decided to round up a handful of the most notable and interesting crashes in market history.
  • Visit Business Insider’s homepage for more stories.

For as long as there have been financial markets, there have been market crashes.

The March 2020 market crash – driven by the rapid spread of coronavirus around the world – is just the latest in a long line of panics throughout the hundreds of centuries that have roiled markets, crashed economies, and led to financial ruin for countless people.

Generally driven by investor panic and loss of confidence in the markets, often after a period of excitement and speculation, market panics are features of the financial and economic system around the world.

From the infamous Tulip Panic of the 17th century, to the 2008 financial crisis, Markets Insider decided to round up a handful of the most notable and interesting crashes in market history. Check them out below.

Covid-19 Market Crash, 2020

GettyImages 1211234256

The novel coronavirus outbreak not only led to a global health crisis, but also the most recent global financial recession beginning on February 20.

Although the biggest impact of the crash was initially felt in China, it quickly spread to the rest of the world as the virus spread, forcing lockdowns and plunging economic activity around the globe.

The US officially entered recession, and virtually every other economy around the world is set to follow.

Markets were initially stunned, and on March 16, the S&P 500 reported its steepest drop since 1987 as many businesses were forced to shut down and travel restrictions were set in place. The market’s reaction was sharp but short-lived, and by June, stocks were back to their pre-crash levels.

Oil Price Crash, 2020

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US oil prices went into negative territory for the first time in history on April 20, 2020 as the commodity faced a staggering drop in demand during the coronavirus pandemic as travel virtually ceased.

As the May futures contract for oil expired, many traders were faced with taking delivery of physical oil, so were forced into panic selling, which in turn pushed the commodity below zero.

In March, oil producers cartel OPEC held discussions to reinforce production cuts amongst allies from 2.1 million barrels per day to 3.6 million bpd and to continue this until the end of 2021.

Russia disagreed and a price war was launched by OPEC’s top trading member Saudi Arabia to fight for a greater market share. 

Oil lost almost a third of its value with Brent crude crashing 24% to $33.36 and US oil dropping 34% to $27.34.

China’s Stock Market Crash, 2015

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Over three weeks in June 2015, fear of a market seizure and growing financial risks across the country caused chaotic panic selling which erased over $3 trillion in the value of Mainland shares.

Possible triggers of the market crash include a surprise devaluation in the Chinese yuan and a weakened outlook for China’s growth, which then put pressure on emerging economies that relied on China for growth.

The crash’s worst day was on June 12, when the Shanghai stock index lost about a third of its value, while losses were even more pronounced in the smaller Shenzhen Composite. 

Source: CNN

Global Financial Crisis, 2008

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Known to be the worst crash since the Great Depression, the 2008 financial crisis grew out of deregulation in the financial industry that eventually led to the inflation of an enormous housing bubble.

Like all bubbles, it eventually popped, as housing supply overtook demand and house prices fell, making it difficult for homeowners to meet their mortgage obligations, leading to a wave of defaults 

The crisis worsened when investment bank Lehman Brothers — which was highly exposed to the sub-prime market — collapsed. Numerous other lenders were bailed out by governments around the world, and markets crashed, before the global economy spiralled into recession.

Source: The Economist

The Dot-com Bubble, 1990’s

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This bubble was fueled by investments into tech-based companies during a bullish market in the late 1990s.

By the end of 2001, dozens of companies had gone bust, and the share prices of tech giants like Cisco and Intel plunged.

Over $7 trillion in market value was destroyed, and equities entered a bear market.

It took the tech-heavy Nasdaq fifteen years up to April 23, 2015 to regain its dot-com peak. 

Source: Grin

The Asian Financial Crisis, 1997

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With its origins in Thailand, a severe financial crisis struck many Asian countries in late 1997.

Foreign investors were worried that Thailand’s debt was rising too rapidly when Bangkok unpegged its currency from the US dollar, and general confidence evaporated.

Indonesia, South Korea, Hong Kong, Laos, Malaysia, and the Philippines were the most affected countries as currency declines spread rapidly across, and they saw a drop in capital inflows of over $100 billion.

The Asian crisis eventually destabilized the global economy at the end of the 1990s.

Source: Britannica

Black Monday, 1987

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Traders at work on the floor of the New York Stock Exchage shortly after the opening bell, September 24.

33 years ago, global financial markets witnessed one of their worst days in what came to be known as Black Monday.

The crash began in Asia, gained ground in London, and wound up with the Dow Jones Industrial Average weaker by 22.6% the same day in New York.

It is believed the crash was triggered by a combination of computer-based trading models gone wrong, a fall in oil prices, and rising US-Iran tensions. 

But unlike the 1929 market crash, Black Monday did not lead to an economic recession.

Source: Quartz

Wall Street Crash, 1929

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The “Roaring 20s” were an age of excess and wild speculation. That all came to an end in September and October 1929, culminating in Black Tuesday, 29 October, when 16 million shares were sold on the NYSE in one day and the market collapsed

On 21st October, panic selling kicked off and by the tragic 29th, prices fully collapsed.

Finance legends like the Rockefeller family and William Durant ventured to correct the market by purchasing large quantities of stocks, but the rapid price drops did not stop. 

By 1930, America was in the Great Depression — possibly the most painful crash in recorded history.

It spread well beyond the US, and by 1932, the world’s GDP had contracted around 15%.

Source: History Extra

Vienna Stock Exchange Crash, 1873

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On the historic Black Friday, 9 May 1873, unlimited speculation in banks and companies that existed only on paper set off a massive fall in value of shares on the Vienna stock exchange and caused a wave of panic selling.

This marked the beginning of a lesser-known Great Depression that lasted five years and spread across Europe and to the US. 

The crash brought economic growth in the Habsburg Monarch to an end, and harshly impacted a group of bankers, some counselors of the imperial court and friends of the Emperor, including the imperial family itself. 

Source: Habsburger

Dutch Tulip Mania, 1637

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The Tulip mania was one of the first recorded financial bubbles, and occurred primarily in the Netherlands between 1634 and 1637.

After tulip bulbs contracted a non-fatal tulip-specific mosaic virus, their prices rose steadily and made the already overpriced flower even more popular and exotic. Tulip bulbs then saw a 20-fold increase in value in just one month.

But as it happens in speculative bubbles, holders eventually began to sell off their tulips to solidify their profits resulting in a doom loop of continuously lower prices. Although it was not a widespread craze, it hurt a handful of buyers in the short-lived luxury market.

More than anything, the tulip bubble crash serves as a lesson for the perils that excessive greed and speculation can lead to.

Source: Barrons

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