(It's hard to find a cause and effect pattern so to what extent does the American stock system affect stock systems overseas?) Over longer periods then there is a reasonably clear cause and effect. The real driver has not been the stock market but the money, credit, and mortgage markets and equity markets have been passive victims. (When there's a housing crunch in the U.S., why is it that a person in Bulgaria might have trouble getting a mortgage?) the problem you have here is that mortgages in the U.S. no longer belong to people only in the U.S. mortgages were packaged and sold on the market. So a lot of normally conservative banks brought this stuff, including banks in Europe, making it a fully globalized problem. (So where does this problem end then?) With respect to the housing crunch, it's primarily Europe. The Japanese banks and emerging markets weren't as heavily affected. (Give me more examples of counter effects globally.) The global finance system depends on short term loans between banks and when you begin to lose confidence in loaning, the whole bank system freezes up. So something needs to be done to restore that confidence. There are other countries who have had their own version of the same problem, and Britain is a good example of this. (Who else is insulated right now from the U.S. banking crisis?) Virtually no one. The banking systems still largely operate on the dollar. (There was this political breakdown here and how much does this cause a crisis in confidence abroad?) What was important about it is that it was unexpected. This demonstrated that the leaders weren't in control and that was scary. That initial shock has now gone away bit which explains the slight recovery.