Below The Beltway

Yesterday’s bad day on Wall Street spread overseas while America slept:

SEOUL, Oct. 8 — The rout in global stock markets continued on Wednesday, with Japan’s Nikkei suffering a historic one-day loss, officials in Seoul worrying about a cratering currency, and European shares plummeting despite announcement of a U.K. bank bailout plan.

Fear and a decaying economic outlook pushed indexes from Tokyo to London down sharply. Regulators in Indonesia and Russia halted trading early in the day after fast declines of more than 10 percent.

The Nikkei 225 fell 9.4 percent, the largest single day loss since the Black Monday market crash in Oct., 1987. The Nikkei is now down more than 40 percent over the last year. Markets in Hong Kong dropped more than 8 percent, and those in Singapore and South Korea were down 6 percent and 5 percent respectively.

Insulated somewhat from the global financial crisis, with banks that are holding large cash reserves, the Japanese economy has nevertheless been rattled by the sharp downturn in global car sales — a critical component of its export-dependent economy.

And, in Europe…..

[M]ajor European indexes were down anywhere from 3.5 percent to almost 6 percent. The losses follow a 5 percent drop in the Dow Jones industrial average on Tuesday, and pessimistic comments from Federal Reserve chairman Ben S. Bernanke about the state of the economy.

Though the Fed chairman hinted that an interest rate cut may be appropriate to stimulate growth, some analysts and investors feel a more dramatic step — coordinated between the Fed and other major central banks — is now needed.

U.S. stock market futures pointed to a sharply lower opening again on Wall Street.

South Korean officials, meanwhile, were facing a steep drop in the value of the nation’s currency and growing concern about the stability of the banking system.

The fall in Europe came despite an announcement of a massive bank bailout in Britain.

It’s going to be an interesting day on Wall Street.