Overseas markets got remarkable worse overnight. The Japanese Nikkei dropped 11.4% to 8,458. The Hang Seng in Hong Kong moved down 6.1% to 15,027. The Shanghai Composite dropped 4.3% to 1,910.

In early trading in Europe, the British FTSE fell 5.8% to to 3,842. The German DAX was off 5.4% to 4,602, and the French CAC 40 dropped 5.9% to 3,182.

Data from Reuters.

Douglas A. McIntyre is an editor at 247wallst.com.

Following the Dow and the NASDAQ here in the Americas, European and Asian markets almost unilaterally lost any previous gains, as the major indexes all fell. Both Henry Paulson and Ben Bernanke were both being pitched in the media as potentially saying the credit market losses were hurting the U.S. economy. As a result, the U.S. dollar was at a record low against the euro.

If it's not one thing with the U.S. economy, it's another, when it comes to the complete mess the mortgage overextension problem has created. Said Roberto Mialish from Unicredit Markets & Investment Banking: "The markets are reacting negatively to the renewed credit crisis in the U.S. and that's hurting the dollar across the board ... the market is speculating that Bernanke will offer a gloomy outlook for the U.S. economy.''

Below is a foreign market review for this morning:

European markets:

• The Dow Jones Euro Stoxx 50 Pr: at 3,132.37, down 83.87 (-2.61%)
• The FTSE 100 Index: at 5,173.10, down 127.30 (-2.40%)
• The DAX 30: at 6,049.42, down 150.83 (-2.43%)
• The S&P/MIB Index: at 27,059.00, down 689.00 (-2.48%)

Asia/Pacific markets:

• Nikkei 225 Average: closed at 12,754.56, down 255.60 (-1.96%)
  
• The S&P/ASX 200 Index: closed at 4,815.70, down 105.30 (-2.14%)
  
• Hang Seng Index: closed at 21,174.77, down 839.69 (-3.81%)

Hong Kong markets fell along with most Asian indexes as Foxconn International led a tech stock slump and HSBC led finance stocks lower yet again on fears originating out of the U.S.

Bloomberg quoted Nisu Harajchi from N1 Asset Management as saying "I'd want to stay away from the entire equity market ... if you look at the U.S. economy, housing market, and these newly created problems, which is the credit crisis, this is a big thing, taking the entire financial industry down.''

InBev will indeed acquire U.S. alcoholic beverage maker Anheuser-Busch for $52 billion after a month of court battles and what was appearing to be the start of a hostile takeover. This puts the 156 year-old American icon under Belgian control for the first time ever.

Below is a foreign market review for this morning:

European markets:

• The Dow Jones Euro Stoxx 50 Pr: at 3,227.57, up 39.79 (1.24%)
• The FTSE 100 Index: at 5,360.70, up 99.10 (1.88%)
• The DAX 30: at 6,231.66, up 78.36 (1.27%)
• The S&P/MIB Index: at 27,893.00, up 217.00 (0.78%)

Asia/Pacific markets:

• Nikkei 225 Average: closed at 13,010.16, down 29.53 (-0.23)
  
• The S&P/ASX 200 Index: closed at 4,921.00, down 58.90 (-1.18%)
  
• Hang Seng Index: closed at 22,014.26, down 170.09 (-0.77%)

Citigroup decided to sell its German retail banking division to France's Credit Mutuel for $7.7 billion as the financial behemoth continues reeling from the mortgage loan mess. In addition, analysts speculated that the European-region probably shrank for the first time since the single-currency Euro was formed almost 10 years ago.

In Japan, Shinsei Bank agreed to buy General Electric's consumer financing arm for $5.4 billion as GE continues to seek the sale of non-core operating units, such as its global appliance business months ago.

Below is a foreign market review for this morning:

European markets:

• The Dow Jones Euro Stoxx 50: at 2,819.21, down -14.51 (-0.51%)
• The FTSE 100 Index: at 5,391.40, down -15.40 (-0.28%)
• The DAX 30: at 6,234.31, down -70.69 (-1.12%)
• The S&P/MIB Index: at 28,590.00, down -181.00 (-0.63%)

Asia/Pacific markets:

• Singapore Straits Times: closed at 2,926.84, up 25.26 (0.87%)
  
• Nikkei 225 Average: closed at 13,039.69, down 27.52 (0.21%)
  
• The S&P/ASX 200 Index: closed at 4,979.90, up 42.50 (0.86%)
  
• Hang Seng Index: closed at 22,184.25, up 362.77 (1.66%)

European markets slumped and Asian markets held steady on the back of Wednesday's 236-point drop in the Dow Jones industrial average.

European markets:

• The Dow Jones Euro Stoxx: closed at 3,293.85, down -48.63 (-1.45%)
• The FTSE 100 Index: closed at 5,435.70, down -93.90 (-1.70%)
• The CAC 40 Index: closed at 4,258.26, down -81.40 (-1.88%)
• the S&P/MIB Index: closed at 28,590.00, down -181.00 (-0.63%)

Asia/Pacific markets:

• The MSCI Asia-Pacific Index: virtually flat at 132.05 after a drop of about 0.6%. Tech stocks were the decliners, while financial stocks were the advancers
• Nikkei 225 Average: up to 13,067.21, a gain of 0.1%. Singapore's economy expanded at the slowest pace in five years while New Zealand's manufacturing industry shrunk for the third time in four months in June. Said Chua Hak Bin with Deutsche Bank Private Wealth, "We think growth will be sub-par until the end of next year and there are signs the slowdown in the U.S. is broadening." Mitsushige Akino with Ichiyoshi Investment Management in Tokyo added, "Investors have realized there's no reason to sell Japanese banks based on the U.S. credit crisis ... they've been picking up more business overseas.''
• Hang Seng Index: up to 21,821.78, a climb of 0.073%. The Hang Seng's decline since November's high of over 31,000 isn't showing any decent recovery as of late. No surprise there.

Most markets in Asia sold off sharply.

The Nikkei fell 4.5% to 12,992. Canon was down 5.2% to 4570 yen. Honda (NYSE:HMC) was down 5.8% to 3070. Toyota (NYSE:TM) was down 3.3% to 5560.

The Hang Seng dropped 3.1% to 23,585. China Netcom (NYSE:CN) fell 23.5 yuan. PetroChina (NYSE:PTR) fell 4.9% to 11.26.

The Shanghai Composite moved up 2.1% to 4,438.

Data from Reuters.

Douglas A. McIntyre is an editor at 247wallst.com.

Markets in Asia fell:

The Nikkei traded down 4% to 13,088. Sony (NYSE: SNE) fell 4.5% to 4,880. Toyota (NYSE: TM) fell 4.1% to 5,340.

The Hang Seng fell 4.3% 24,054. China Life (NYSE: LFC) fell 6.3% to 31.40. PetroChina (NYSE:PTR) fell 5.7% to 11.2.

The Shanghai Composite dropped 7.2% to 4,419.

Data from Reuters.

Douglas A. McIntyre is an editor at 247wallst.com.

The proverbial wisdom is that diversification across various asset classes and regions of the world protects against volatility and big losses: when one is down big, the others will pick up the slack, and your actual loss won't be so bad after all. Marketwatch reported on the performance of international markets in the most recent trading session:

India: Down about 16% since Friday's close.

Japan: Down about 5.7% on the day.

Hong Kong's Hang Seng: Down 8.7%.

Australia: Down 7.1%.

France: Down 6.8% on Monday.

Germany's blue-chip DAX 30: Down 7.2%.

I could go on, but the point is that all of these markets appear to be tumbling on concerns about a U.S. recession. Here's my question: Has globalization made our markets so interconnected that global diversification no longer does much to reduce volatility?

It may well be that investors hell-bent on avoiding volatility ; there's an argument that if investors can just control their emotions, volatility isn't such a big deal. There may need to look to other sources for diversification, such as currrency, commodities, etc.

Just a thought.

As bad news mounts and fears grow about the impending recession, stock markets dropped around the world in Monday trading. Adding to the woes, analysts expect that the Bank of China may have to write off at least 25% of its $8 billion [subscription required] mortgage securities holdings in the U.S. Prior to these reports, the bank had only admitted to the need for a $322 million provision for losses, according to today's Wall Street Journal.

Europe's Dow Jones Stoxx 600 Index took its steepest fall since its Sept. 11, 2001 tumble, dropping 4.2%. Since it reached its 6 1/2 year high in June, the index has dropped 22%. A drop of more than 20% puts this market officially into bear territory.

Other key losers today include:

• France's CAC 40 lost 5.1%
  
• UK's FTSE 100 dropped 4%
• Germany's DAX went down 5.9%
• MSCI Asia Pacific Index lost 3.7% and the MCSI Emerging Markets Index fell 5.1%
• Hong Kong's Hang Seng Index gave up 5.5%
• Japan's Nikkei 225 Stock Average lost 5.1%

With this type of global bloodbath, expect U.S. stocks to tank when they reopen tomorrow. They are closed today for the holiday. Investors are seeking safe havens in bonds and currencies.

Lita Epstein has written more than 20 books including "Trading for Dummies."

China is beginning to admit that slow growth in the U.S. would be a significant enough drag to badly damage its exports and hurt its economy. "If U.S. consumption really comes down, that's bad news for us. That will have a pretty severe impact on our exports," Zhang Tao, deputy head of the international department of the People's Bank of China, told a group including Reuters.

Any slowdown is likely to hit the Chinese stock markets hard. Despite a recent pullback, the Hang Seng Index is up over 60% in the last two years while the S&P has barely risen. The Shanghai Composite is up over 300% during that period.

Downward pressure on China shares could affect many stocks listed in the U.S. Among the most vulnerable are probably those that have risen the fastest. That would include Baidu (NASDAQ: BIDU), which is up about 130% in the last year, and China Mobile (NYSE: CHL), which is up over 70%.

If a U.S. recession hits China, the markets there may have seen their best days.

Douglas A. McIntyre is an editor at 247wallst.com

Markets in Asia took a beating as the Hong Kong Hang Seng fell 5%. Key China stocks moved down sharply. China Mobile (NYSE:CHL) fell 7%. China Petroleum (NYSE:SNP) fell over 10%.

The Shanghai Composite fell 2.5%.

Douglas A. McIntyre is an editor at 247wallst.com.

Markets in China jumped up.

The Hong Kong Hang Seng rose 3.4% to 31,449 lead by telecom shares. China Unicom (NYSE:CHU) rose 8.2% to 18.42.

The Shanghai Composite moved up 2.8% to 5,748.

Douglas A. McIntyre is an editor at 247wallst.com.

Markets in Shanghai and Hong Kong were up sharply again overnight.

The Hang Seng rose 2% to 29,133. China Petroleum (NYSE: SNP) was up over 11%. Hang Seng Bank rose over 7%

The Shanghai Composite rose 2.5% to 5,913, a record.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Markets in Asia rung up tremendous gains after a rate cut by the US Federal Reserave.

Share in Tokyo rose 3.7% and in Hond Kong the Hang Seng index was up 4.3%. According to Reuters, the gain in Japan's Nikkei was the largest in a single day since 2002.

Douglas A. McIntyre is a partner at 247wallst.com