Dominating the news on Monday January 21, 2007 – a day when the stock market is closed in the United States – is news about huge market losses in other countries. No longer a “fear of recession”, it is plain that recession already hit the United States. One report says if the recession lasts longer than nine months it will cause another global economic problem. Others theorize that the United States has been in a recession since 2001, masked by ‘free money’ from the housing market. Here is what happened around the world in the markets on Monday:

Hong Kong, Shanghai and India were down by more than 5 percent during the day

South Korea and Australia fell by nearly 3 percent

FTSE 100 index of leading British shares fell by more than 300 points

Germany’s Dax index was down by more than 500 points

Shanghai’s Composite Index closed down 5.1 percent

Hong Kong’s Hang Seng fell 5.5 percent

Chinese banks were hard hit Monday, in part because they hold the bulk of Asia’s exposure to United States subprime mortgages

Japanese stock markets fell Monday to their lowest levels in more than two years

The Bombay Stock Exchange’s Sensex index plummeted 7.4 percent

The Toronto stock market lost four per cent of its value — or about $70 billion in value

How is that for news around the world? What will happen to the Dow on Tuesday? In retrospect one might say that “liar loans” and adjustable rate mortgages like popular “pay anything you want” mortgages have come back to bite the world like a rabid dog.