The Crisis Dwarfs $700B

A US-centric band aid can't quell global markets as confidence plunges
By Clay Dillow,  Newser Staff
Posted Oct 7, 2008 10:18 AM CDT
A woman walks past a financial display board showing the FTSE 100-share index in central London, Monday, Oct. 6, 2008.    (AP Photo/Lefteris Pitarakis)
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(Newser) – As the financial crisis continues to grow, the $700 billion bailout passed by Congress last week may be too little too late, the Washington Post reports. The plan may not begin relieving banks of toxic assets for another month, and, meanwhile, the crisis has gone global, making $700 billion seem like a paltry amount.

In emerging markets, where financial protections are scant, panic threatens to undo years of prosperity as credit has dried up, and banks and governments face insolvency. Markets in Brazil and Russia closed yesterday to prevent a massive sell-off and China’s markets fell 5%. The growing global crisis has reached a “tipping point,” the World Bank president said, and "will trigger business failures and possibly banking emergencies.”