Stocks Fall Worldwide

America will wake up Wednesday with--judging from the startled news reports--a whole new economy that is suddenly tettering on the verge of a recession.

Following stock sell-offs in China...

Chinese stocks plunged nearly 9 percent Tuesday, their biggest drop in a decade, rattling markets from Hong Kong and Singapore to as far away as New York amid concerns over a possible slowdown in China's economy.

One day after sending Shanghai's benchmark index to a record, investors dumped stocks to lock in profits amid speculation about a fresh round of austerity measures from Beijing to slow the nation's sizzling economy.

...and Europe...

Europe's leading stocks plunged on Tuesday after a sharp sell-off by investors in China sparked fears of a slowdown in the world's hottest economy.

Major European indexes closed about 2.8% lower

...the United States did it's part to suddenly realize the economy isn't doing so hot.

At the close, said Howard Silverblatt, an index analyst with Standard & Poor’s, the S.& P. 500 had lost $452 billion in market value, and other American stocks had shed an additional $180 billion ... It ended with a loss of 3.5 percent.

Even the participants apparently realize they haven't been paying attention and just woke up to the reality of the our economic house of cards.

“It was sort of one of those days where somebody snaps their fingers, and the market’s hypnotic trance is over,” said Stuart Hoffman, chief economist of PNC Financial.

It's days like yesterday that make me ponder the danger of listening too closely to Bush's harranges about how swimmingly the economy is humming along. He apparently was able to convince his sycophants on Wall Street to ignore what they ought to know.

This is to say that the state and workings of the economy are going to be a serious focus for this blog moving forward.

Update 11:12pm: Looks like Japan is keeping the ball moving (via Bonddad)

TOKYO, Feb 28 — Tokyo's Nikkei average tumbled more than 3 percent on Wednesday as investors rushed to sell shares of everything from Sony Corp. to Softbank Corp. following steep losses on Wall Street.

This, of course, followed the seven-year high reached on Monday.