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.

Stock

Loss in Market Value

General Electric (NYSE: GE  )

$241 billion

JSC Gazprom

$233 billion

Bank of America

$151 billion

PetroChina (NYSE: PTR  )

$147 billion

Petrobras (NYSE: PBR  )

$136 billion

China Mobile (NYSE: CHL  )

$134 billion

Exxon Mobil (NYSE: XOM  )

$128 billion

Rio Tinto Ltd.

$126 billion

American International Group (NYSE: AIG  )

$117 billion

Citigroup (NYSE: C  )

$115 billion

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 crisis notwithstanding, China's long-term growth story is far from extinguished. However, the crisis doesn't make sorting out the winners from the losers any easier. If you're looking for a knowledgeable guide, Motley Fool Global Gains is here for you with analysts that spend time on the ground looking for outstanding growth companies. To find out their top five recommendations for new money now, take advantage of a 30-day free trial today.

Fool contributor Alex Dumortier, CFA, has no beneficial interest in any of the companies mentioned in this article. Petroleo Brasileiro is a Motley Fool Income Investor pick. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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