Singapore – The numbers flashing on trading screens on Aug 5 were shocking even to market veterans.

In Tokyo, the Nikkei 225 was down 12 per cent. In Seoul, the Kospi index sank 9 per cent. When the opening bell rang in New York, the Nasdaq plunged 6 per cent in seconds.

Cryptocurrencies sank; the VIX, a gauge of stock market volatility, skyrocketed; and investors piled into Treasury bonds, the safest asset of them all.

Whether the wild gyrations on Aug 5 mark the final bang of a global sell-off that started to build last week, or signal the beginning of a protracted slump, is impossible to know.

But one thing is clear: The pillars that had underpinned financial-market gains for years – a series of key assumptions that investors…