Stocks in Europe, Asia, U.S. Futures Drop; Lloyds, HSBC Decline

By Adam Haigh

March 9 (Bloomberg) -- Stocks in Europe and Asia declined and U.S. index futures retreated after billionaire investor Warren Buffett said the economy has “fallen off a cliff” and the U.K. government took control of Lloyds Banking Group Plc.

Lloyds, Britain’s biggest mortgage lender, sank 9.3 percent, while the yield on the 10-year gilt fell to the lowest level since at least 1989. HSBC Holdings Plc plunged the most in at least 23 years in Hong Kong on concern that deepening loan losses at its U.S. unit will curb profits. Shinsei Bank Ltd., the Japanese lender partly owned by Christopher Flowers, slid 8.8 percent on plans to raise capital.

The MSCI World Index slipped 1.2 percent to 689.12 at 11:16 a.m. in London. A third government rescue for Citigroup Inc. and dividend cuts at companies from General Electric Co. to JPMorgan Chase & Co. have sent the gauge of 23 developed countries to a 25 percent drop this year, the worst start since the measure was created in 1970.

“Clearly we are in a deep recession and are still on the way down in most economies,” Michael Dicks, head of research and investment strategy at Barclays Wealth, which oversees about $203 billion, said on Bloomberg Television in London. “Nobody has sniffed the bottom to the point where they are willing to get their checkbook out” and buy equities, he said.