Stocks Drop Worldwide as Treasuries Advance on Concern Economies Worsening (Adam Haigh)

  March 2 (Bloomberg) -- Stocks in Europe and Asia fell, U.S. futures slumped and Treasuries rose as Warren Buffett said the economy is in a “shambles” and American International Group Inc. announced a $61.7 billion loss.

  HSBC Holdings Plc tumbled 20 percent in London, the biggest drop since at least 1992, after saying it plans to raise 12.5 billion pounds ($17.7 billion) in a rights offer, increasing concern that financial firms need more capital. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank, retreated 6.8 percent as the nation’s wage declines accelerated. BHP Billiton Ltd., the world’s largest mining company, lost 5 percent as oil fell more than 5 percent and copper, nickel and aluminum dropped.

  “Things are getting worse,” said Alex Crooke, portfolio manager at Henderson Global Investors in London, which has about $125 billion. “The economy is still deteriorating and bad debts are still going to appear,” he said in a Bloomberg Television interview.

  The MSCI World Index of 23 developed countries sank 2 percent to 736.08 at 12:20 p.m. in London, extending its 2009 decline to 20 percent, the worst start to a year since the gauge was created in 1970. The MSCI Emerging Markets Index slid 3.6 percent, while Hungary’s forint fell after European Union leaders spurned aid pleas for eastern Europe.

  Read The Entire Story