Lehman Brothers’ bankruptcy, along with news that mammoth insurer AIG is seeking a $40 billion Federal Reserve loan, has sent European and Asian markets, US futures and the dollar sharply downward, Bloomberg reports. Swiss-based UBS AG, Europe’s bank most hurt by the subprime crisis, plunged 7.2%. Australia’s biggest investment bank, Macquarie, fell 10%, and S&P futures expiring in December fell 2.9%.
Meanwhile, stock indexes dropped over 3% in France, Spain, Taiwan, the Philippines and India—and the dollar fell 1.9% against the yen. “The global credit crisis has permeated through all markets,” said an analyst. Europe’s Dow Jones index dropped 2.7% and the MSCI Asia Pacific, excluding Japan, sank 1.5%. “It’s mayhem,” said an expert. "If you thought the US economy was slowing, that fear has been amplified, with implications for global economic activity."