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World Markets Depressed Despite US Stimulus and Banking Moves

Despite Senate passage of its massive stimulus package and the U.S. banking bailout plan announced by Treasury Secretary Timothy Geithner, overseas markets did not react with enthusiasm.

In Asia, investors reacted with skepticism to the latest revamped U.S. bank bailout plan that could cost about $2 trillion.

Traders pointed to a lack of detail in the plan for the downturn. They also questioned whether the plan would be enough to absorb the bad assets saddling bank balance sheets and free up frozen credit markets for consumers and businesses.

Also not helping, the U.S. trade deficit falling to a six-year low in December on a sharp drop in imports. The recession has cut demand for oil, autos and other foreign-made products.

In Hong Kong, the Hang Seng dropped 2.5 percent. Australia and India indexes fell by about 0.5 percent. Japanese markets were closed for a national holiday.

Also impacting the markets were new figures showing China's exports plunged 17.5 percent in January - the sharpest drop in more than a decade.

In Europe, trade was flat at best with bank stocks dragging down most indexes. Worse than expected fourth-quarter losses at Credit Suisse added to the downward pressure.

Here in Britain, new figures show that nearly two million are unemployed in the country and Prime Minister Gordon Brown came in for a grilling in his weekly parliamentary question session.

"It is right to say that for every person who is made unemployed, there is a sadness and sorrow and we will do what we can to help people back to work as quickly as possible," he said. "Our determination is to give people help; help to stay in jobs where possible, help to get new jobs and help for people who are existing unemployed people to get work as quickly as possible."

Although his government has aggressively launched a number of programs to help people through this difficult downturn, it is too early to see any positive results.

Mr. Brown is also down in the public opinion polls and he came under strong criticism from opposition politicians in the House of Commons for not doing enough.

"We are now bringing through the banking bill which is in the House of Commons this week," he said. "The measures that will enable us to go further and provide a better insurance scheme for people who have problems with their mortgages, I tell him, we have taken the action that is necessary. We will continue to take whatever action is necessary. He should be supporting us and not criticizing us."

Some projections point to unemployment peaking at about three million by the end of the year. That would mean an unemployment rate of around 10 percent.