Financial Crisis Impact on the Rest of the World

Our financial crisis is even causing concern in countries that have been rather critical of the US, especially in Latin America. See this article, for example, which notes:

Whipsawing global markets are already having a ripple effect across Latin America. As nervous investors pulled money out of emerging markets, Brazil’s currency, the real, plunged 16 percent against the dollar last month, resulting in hundreds of millions of dollars in losses at large food and eucalyptus-pulp exporters that placed bad bets on the direction of the real.

The crisis has had a big impact on Russia. The stock market has been closed on two separate days, an investment bank sold a large stake (50% minus 1 share) to an oligarch, and the government has been pumping money to support markets. The reason is that indebted banks have faced margin calls, especially as foreign investors flee to security in the worldwide crisis. What is important to remember is that Russia still has more than $570 billion in foreign reserves. This shows just how linked international markets are.