The World Financial Crisis Gets Worse…Much Worse

I normally don’t cover finance because I don’t know much about it but who can ignore the current situation. According to CNN: “Approximately $1.2 trillion in market value is gone,” after the United States House failed to reach an agreement on a ‘bailout plan’ that would effectively stabilize the U.S. economy. The effects are reverberating throughout the world in a big way…

From Asia…

Asian and Pacific stock markets tumbled in early trading Tuesday after the U.S. House of Representatives failed to adopt a $700 billion bailout measure, triggering a huge drop in U.S. stocks.

Japan’s Nikkei Index was down nearly 550 points – or 4.6% – at 11,199.02, two hours into the trading session. The Australian Securities Exchange was down nearly 150 points – or 3.8% – to 4,560.9.

The Hang Seng index in Hong Kong opened more than 5% lower.

From the U.S…

Stocks skidded Monday, with the Dow slumping nearly 778 points, in the biggest single-day point loss ever, after the House rejected the government’s $700 billion bank bailout plan.

The day’s loss knocked out approximately $1.2 trillion in market value, the first post-$1 trillion day ever, according to a drop in the Dow Jones Wilshire 5000, the broadest measure of the stock market.

and from Britain…

European governments had to step in with a flurry of major bank bailouts from Iceland to Germany as fear and turmoil from the U.S. credit crisis spread through the financial system.

Germany organized a credit lifeline for blue-chip commercial real estate lender Hypo Real Estate Holding AG, while Iceland’s government took over Glitnir bank, the country’s third largest

Shares in Fortis, Belgium’s largest retail bank, continued to fall Monday after Belgium, the Netherlands and Luxembourg agreed to an €11.2 billion ($16.4 billion) bailout package late Sunday to avert a run on the bank. The three governments took a 49% stake in exchange and demanded Fortis sell the stake it had bought in ABN Amro a year ago for €24 billion – a move that many analysts believe started its troubles.

The bailout was meant to restore confidence in the bank before the reopening of markets on Monday after a tumultuous week of imploding share values at Fortis.

Santander, the second largest bank in Europe, said it will pay £612 million ($1.1 billion) for Bradford & Bingley’s 197 branches and £20 billion of deposits.

Britain earlier this year nationalized Northern Rock, but not until after the mortgage lender suffered a damaging run on its deposits by spooked customers. The government is keen to move quicker to avert any repeat of that situation.