This is the maximum severity level. Markets are experiencing broad dislocations, liquidity is evaporating, and normal price discovery is impaired. Expect emergency policy responses.
Forced selling across asset classes. -20% to -40% equity drawdowns. Credit markets seize. Only the most liquid instruments trade freely.
Bid-ask spreads blow out. Market makers step back. ETF discounts to NAV appear. Repo markets may show stress.
Expect emergency rate cuts, QE programs, lending facilities, fiscal packages. Past episodes: TARP (2008), ECB "whatever it takes" (2012), Fed unlimited QE (2020).
The best buying opportunities in a generation occur at PHASE 2. But timing the bottom is nearly impossible. Dollar-cost averaging and quality focus historically rewarded within 6-18 months.
PHASE 2 is rare — only 3-4 episodes per decade. GFC 2008, European sovereign crisis peak 2012, COVID March 2020. Every PHASE 2 in the last 50 years was followed by massive central bank intervention.
2-8 weeks of acute stress, 3-12 months to full recovery
>20% of news contains crisis keywords — media panic
High panic keyword percentage indicates widespread crisis coverage
Single region >30% of crisis articles — regional focus
Geographic concentration indicates specific regional crisis
Crisis news >2hrs old but still high panic — ongoing crisis
Sustained coverage indicates crisis is not resolving quickly
Poland is tracked via local news only — no liquid market instruments available. Scoring uses the per-region news feed below.