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Despite Hank Paulson's call for confidence in global markets, the Karachi Index in Pakistan got crushed again, closing down -4.4% on the day.

Since June 26, Pakistan has lost another -10.2% of it's value, and this begs the simple question as to why?

The reality is that geopolitical risk in this increasingly interconnected global economy does not go away because it is ignored.

Pakistan is dealing with their worst crisis of stagflation in modern history, and the confidence in their domestic political leadership is gone.

These pictures are scary. It is global this time, indeed.

KM

(picture: http://img.dailymail.co.uk/i/pix/2007/12_04/bhuttoflameES_468x355.jpg)