In Australia, across Asia, and then through Europe, economic markets fell following the U.S. Dow’s tepid response to the White House’s special tax relief package to help boost the American economy.

On Friday, Jan. 18, President George W. Bush proposed a $145 billion tax relief package to encourage consumer spending and hopefully prevent a recession. The stimulus plan would include tax breaks and spending measures to the American public.

Mr. Bush’s plan is in response to the nation’s housing crisis. As homeowners struggle with higher mortgage repayments, default rates are increasing, causing banks to be more careful with lending.

In response to the proposed stimulus package, which needs congressional approval, the Dow fell .5%, to 12,099.30 points—a market loss of 9% for the year so far.

Asian markets, which had taken for granted that America’s economy would stay strong, panicked as the possibility of a U.S. recession loomed closer to reality. Driven by fear and uncertainty, markets in India, Japan and China, along with Australia, fell.

• Shanghai’s Composite Index: down 5.1%

• Tokyo’s Nikkei 225 Index: fell 3.9%, to 13,225.94 points

• India’s Sensex: down 7.4%, falling 1,353 points—the market’s second largest drop

• Hong Kong’s Hang Seng: down 5.5%, to 23,818.86 points

• Australia’s ASX 200 Index: fell 2.9%

Hours later, European markets reacted in similar fashion: Frankfurt, Germany’s DAX fell 6.7%; Paris’s CAC-40 fell 4.5%, to 4,861.2 points; and London’s FTSE dropped 3.9%, losing nearly 60 billion pounds worth of shares.

In what is being called a global “Black Monday,” the U.S. economy—one of the world’s largest export markets for Asian and European companies—is being viewed internationally with suspicion, with President Bush’s emergency measures being seen as too little, too late. Investors fear a recession in America, one that could create a worldwide economic ripple effect. Many no longer question if or when, but rather “how deep?” and “for how long?”