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Jakobsen: We are now in crisis mode

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All week the key question for markets had been is this correction or a crisis? – now we have the answer: we are in crisis mode, according to Saxo Bank's Chief Economist Steen Jakobsen.

Exploring the reasons for the carnage in the stock markets and general negative sentiment Steen analyses the role central banks have played. In fact Steen believes that just like in 1989 with the fall of Berlin wall and the Warsaw pact that central bank planning is now ending in the West. 

The lows seen during this current downturn are nowhere near the dramatic crashes seen in 2008 and 2009, 666 in the S&P 500 in March 2009 for example, and Steen argues that to some extent that the markets are seeing what can be called a "healthy correction". However, the re-defined role of central banks and their loss of authority has brought fresh pessimism to already battered markets.