### **Why August to October Is „Panic Season” for Financial Markets**
Historical data reveals a striking pattern: the most severe U.S. financial crises tend to occur between August and October. Economist Owen Lamont of Acadian Asset Management highlights that market meltdowns like the 1987 Black Monday crash, the 1997 Asian financial crisis, the 1998 Long-Term Capital Management collapse, and the 2008 Lehman Brothers bankruptcy all unfolded during these months. Lamont attributes this trend to seasonal liquidity drops—when traders take summer vacations, markets become thinner, amplifying volatility when shocks occur. Even earlier crises, such as the Panics of 1857 and 1907, followed this pattern, suggesting deep historical roots tied to America’s agricultural economy, when harvests demanded capital shifts from cities to rural areas.
### **The Harvest Time Effect and Modern Market Risks**
Lamont’s research shows that lower trading volumes in August and September create a breeding ground for financial disasters. With fewer market participants, sudden large trades can trigger outsized volatility. This phenomenon isn’t new—economists like William Stanley Jevons noted it as early as 1884. Lamont estimates a **10% chance of a major financial crisis occurring between August and October**, compared to just **2% in other months**. While he doesn’t foresee an imminent crash, he warns that market disruptions often arise unexpectedly, as seen in the 2007 quant crash, which few predicted. The rise of remote work could eventually mitigate this seasonal risk, but for now, tradition keeps August a precarious month for markets.
### **Global Implications and the Future of Market Liquidity**
The „panic season” effect is strongest in the U.S., the world’s financial hub, but other regions experience their own seasonal quirks—such as Australia, where market dynamics differ. Lamont acknowledges that while heavy-handed solutions like shutting markets in August could prevent crashes, free-market principles favor allowing trading despite risks. Behavioral finance suggests that human tendencies—like synchronizing vacations—reinforce these patterns. As remote work becomes more common, liquidity may stabilize year-round. Until then, Lamont advises investors to stay vigilant during these historically turbulent months.
*(Source: Fortune.com)*
Ez a cikk a Neural News AI (V1) verziójával készült.
Forrás: https://finance.yahoo.com/news/top-economist-says-panic-season-151000240.html.