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Worldwide Worries

Tech giant Cisco Systems sells about half of its products in foreign markets. But then, the global economy slammed on the brakes.

"We certainly did not expect the slowdown to come this rapidly," said Cisco's Mike Volpi.

And Cisco's overseas business, says Volpi, has been devastated.

"Globally, from its highs, it's fallen off probably somewhere in the 30 to 35 percent range."

What's happened? Germany, Europe's largest economy, has stagnated, Japan is in steep decline, and Latin America, Argentina and Mexico are already in recession. The synchronized slump has crossed nearly every border and industry, reports CBS News Business Correspondent Anthony Mason.

"Nearly every economy that I'm aware of, across the globe, is either in or near recession," said Economy.com's Mark Zandi.

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Early estimates indicate total world output actually fell in the second quarter for the first time in two decades. While each country has its own problems, Zandi says the speed of this slowdown was caused: "Principally by our own economy. We are the global engine of growth. And if our economy is struggling, if the engine is sputtering here, it's clearly causing economies overseas to tank."

Economists call it the international multiplier effect.

"We slow down. They slow down. Which means we cannot sell to them," explained Wells Fargo economist Sung Won Sohn.

You can see the effect on our shipping docks, where exports have stalled.

"The ratio today is about 2 to 1. Containers coming in as opposed to containers going out," explained Rick Larrabee, Director for the Port of New York and New Jersey.

China is a lone global bright spot, but in the rest of Asia and Europe, Cisco's Mike Volpi says: "We don't quite see the bottoming yet. So how deep that valley is, if you will, is hard to gauge."

And that's wht has economists worried. A deepening slump abroad could prevent the U.S. from getting back on its feet and in the worst case scenario, send the entire global economy into recession.

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