In Korea, exporters are suddenly struggling.
In India, industrial growth has slowed substantially.
In Sweden, Volvo is cutting thousands of jobs.
In Japan, which thought it was immune to the current market chaos, a credit squeeze seems to be forcing small companies into bankruptcy.
Around the world, fears of recession have fed a stock market panic, as worries about toxic assets spread from the financial sector to the credit markets and now to the broader economy. Companies from Germany to Asia are hoarding cash because credit markets are tight. Sheer uncertainty is upending plans for businesses to expand. Consumers have pulled back, just as they received some relief from high oil prices.
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Even credit-worthy companies cannot get money in Europe. And across Asia, export growth has slowed to a crawl or started declining in real terms — and that was before American retailers announced steep sales declines on Wednesday.
The United States, once the engine of the global economy, is ailing and in no position to inspire confidence, much less point the way around or out recession. Americans are seen as both the root of the problem and powerless to solve it.
But no government effort — even the unprecedented coordination of central banks on three continents — has been able to stanch the bleeding, which only generates more fear.
The liquidity provided by the European Central Bank, for instance, seems to be going through a revolving door. After releasing billions of euros into the market, the bank took in a record 102.8 billion euros Sept. 30 and 64.4 billion euros on Thursday for banks. Instead of lending their spare cash to each other or the rest of the economy, banks have parked it with the central bank at ultralow interest rates.
“No sane banker with good contacts and clients would do this,” said Erik Nielsen, chief Europe economist at Goldman Sachs in London. “It would be a huge arbitrage profit if they wanted to lend, but they don’t.”
The short-lived notion that Asia had decoupled from the United States and was now operating independent of the American business cycle is all but dead. Asia is the biggest beneficiary of the rise in global trade over the last two decades. Its corporate earnings, real estate prices and much more are dependent on a steady inflow of dollars and euros through exports to the West.
But the International Monetary Fund predicts growth in the 15 nations that use the euro will fall during the second half of this year and barely rise in 2009. Britain, the only major European economy outside the euro zone, is expected to shrink through next year.
Many in Asia, despairing of help from the West, are looking toward Beijing.
But facing slower growth, Beijing is suddenly trying to goose its economy by cutting interest rates and taxes and lowering reserve requirements. But the government is finding the economy already looking a little out of breath.
Economists see annual growth slowing from 12 percent a year ago to 8 or 9 percent this winter.
South Korea is already hurting. “The problem is the global recession — people don’t buy consumer electronics, this means less exports and fewer dollars for us,” said Choi Hae Pyong, an electronics parts manufacturer south of Seoul.
Lower exports have an impact throughout Asian economies, on real estate for instance. As long as the region kept exporting and kept saving the proceeds, investors bid up real estate and share prices. Now prices of both have a long way to fall.
Last week showed the first concrete signs that the financial crisis may be starting to damage Japan’s broader economy. On Wednesday, Tokyo Shoko Research, a market research company, released data showing the number of corporate bankruptcies jumped 34.4 percent last month from a year earlier, to 1,408 failures, a 51/2-year high. Economists said the increase might reflect a growing credit squeeze in which Japanese banks cut back on loans to smaller, lesser-known companies.
Since mid-September, lending to even credit-worthy companies has dried up in Europe.