70 Times Bigger Than the TARP

Fifty trillion dollars -- it's an absolutely staggering amount. That's the estimate of the loss in worldwide stock and bond market value in this crisis -- equivalent to a full year's global gross domestic product (GDP). Put another way, the number is approximately twice the aggregate profits earned by U.S. companies since 1929.

No wonder the Obama administration will push for a global stimulus effort at the upcoming meeting of the G-20 nations.

Asia isn't getting off scot-free
The estimate is part of a study commissioned by the Asia Development Bank that points to disparities in the fallout of the crisis. In particular, it appears that Asia is now paying a heavy toll: Capital losses for Asia ex-Japan total up to $9.6 trillion, or 109% of GDP against a global average of 80%-85% of GDP.

The following table shows that Chinese companies are well represented among the 10 stocks that have suffered the greatest loss in market value in the year to March 1, 2009.

Source: Capital IQ, a division of Standard & Poor's.

Debunking "decoupling"
Although the crisis was slower to hit Asia, the region is now experiencing the brunt of it, utterly debunking the "decoupling" thesis, according to which economic growth in developing nations is no longer dependent on the U.S. economy.

That raises the specter of deteriorating public finances throughout the region. On that basis, however, with an expected fiscal deficit of 3% of GDP and total government debt as a percentage of GDP in the teens, China looks less like a developing nation than some of the leading advanced economies. The new Obama budget projects a fiscal deficit equal to 12.3% of GDP this year.

More Foolishness:

• This Is Why I'll Make Money in China
• Why China's Stimulus Plan Will Change the World