US still dominates the Global financial markets.

The fall of the Share markets around the world, triggered by the US Sub Prime Mortgages default, have once again reinforced the dependency of the world markets on US.

Markets from London to Shanghai plummeted on Wednesday (1st August, 2007) amid worries that problems that began with US Sub Prime Mortgages (loans given to borrowers with lower credit rating) would start infecting other assets.
The Sell off was initiated by Macquarie Bank (Australia’s largest security firm), continued by Bear Stearns which later trickled to other financial markets around the world, pulling them down by 3 to 4%.
Macquarie has dropped by 6.6 percent since Wednesday, due to its earlier announcement of losing 25 percent of its money because of the turmoil in the US credit markets.

The Asian stocks fell extending a global equities sell off, on concern losses in the US Mortgage market which will slow growth and drive up global financing costs.
The Carry Trade (borrowing from place where Interest Rates are low and investing at places where returns are high) through Japan is also diminishing due to the appreciation/ strengthening of Japanese Yen to a four months high.

Investors have already started seeking the safety of Government Bonds over equities and corporate debt thereby raising the demand for US Treasuries.
The sub prime related losses and related activities would put PE deals and also new listings on hold for the next few months.

The Share Markets around the world have been impacted with the sub prime related losses thereby reinforcing the significance and potential of the American Economy.
A slowdown in the American economy pinches Europe and Asia. Any impact on US is contagious and is spread throughout the world market.