Wall Street Meltdown: Global Fallout

NUMBER CRUNCH: New York's crash left investors, such as these in Kuwait, surveying the damage

Raed Qutena / EPA

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It sometimes takes a good financial crisis to remind us just how interconnected we are. When the New York stock market crashed in 1929 the economic shockwaves reached London, Paris and beyond, in one of the first examples of global economic contagion. News travels a little faster these days, and markets don't just follow Wall Street's lead, they anticipate it: stocks in parts of Asia dropped even before New York awoke last Monday, previewing the bloodbath that was to come in the U.S. Here's the buzz (and gloom) from five global financial centers — along with the drop in their main stock index between the moment before opening on Monday and the close of trading three days later.

Mumbai -5.2%
(Sensex, 9/15-9/17)

In an elegant old colonial home tucked into a back lane in south Mumbai, a fashion party is in full swing. Fey young men in low-slung jeans, willowy models in backless silk dresses and other well turned-out, well traveled Mumbaikars laugh, air-kiss and dance into the night.

From inside this world it's easy to be dazzled and forget for a moment that India's markets, like those around the globe, are in the throes of financial turmoil. But even here, worries are starting to surface. Mumbai is India's financial capital, but it's also the center of the country's booming fashion industry and contemporary-arts community. Those three worlds feed each other here, just as they do in London, Tokyo and New York. As the markets plunge — the main Mumbai index, the Sensex, is down 36% since January — many of Mumbai's wealthy financiers are beginning to spend less in the city's galleries and luxury boutiques. "I'm extremely worried," says Jai Bhandarkar, owner of an art gallery in Colaba, one of Mumbai's toniest neighborhoods. "The spending power of the people who collect art is going to be affected. The art market has already gone down so much."

Uncertainty is everywhere. India's financial services and technology companies, which rely on Wall Street for so much of their business, are still waiting to see exactly how badly they'll be hit. Estimates of potential job losses in India reach as high as 25,000. Tata-AIG, an Indian joint venture with troubled U.S. insurer AIG, has been asked by Indian insurance regulators to show proof of its solvency. The market turbulence is especially worrying for India's middle classes, who have just begun investing on their own in a big way. (A new Bollywood movie, Saas, Bahu aur Sensex — Mother-in-Law, Daughter-in-Law and the Sensex — captures the craze.) Bhandarkar, an avid investor himself, is worried: "How can a $60 billion loss not have an impact?" When it does, the party may finally have to end. — by Jyoti Thottam

London -9.4%
(FTSE 100, 9/15-9/17)

Joe Kennedy, scion of America's most famous political family and a wealthy investor in his day, told of selling his holdings before the 1929 market crash because a shoeshine boy had offered him stock tips. The story may well be apocryphal, but in the decades since, shoeshine boys have become a kind of insider's measure of how a market's doing. In the main shopping center in London's Canary Wharf financial district David Peralta is one such oracle, though not because he hands out investment tips.

Peralta, 30, works at a double-seater station and charges just under $8 a shine. Clients had warned him months ago that this year would be tough, he says, "but after that, no problem." A few weeks ago, though, Peralta noticed a change in the way his clients' feet moved. Customers began to say, "they can't talk right now, they have their mind on something else, or they just work on their BlackBerry," Peralta says. "It can be a pain for me, because when people are stressed or moody they tend to fidget and I have to grab their ankle to keep their foot still." In the days leading up to the Sept. 15 nosedive, and since, the clients still talking to him have all been asking the same question. "They want to know what everyone else is saying. 'What are you hearing?' is what they ask. Basically, they want to know how bad people think it is."