2008 marks the year where bailouts for financial companies are as important as parachutes to skydivers. Many companies literally would have crashed if it wasn’t for serious cash infusions from the government or companies smart enough to keep their balance sheet void of toxic debt.

Unfortunately, we had to get uncomfortably familiar with this scenario. Misery loves company. Financial conglomerates all over the world have joined the trend, waving emergency flags at the brink of ruin. Financial problems are spreading like the pestilence in medieval times.

Credit markets are tight and the perception that there is more bad news to come fuels the stinginess of lending institutions further compounding the problem. If it was fire, you’d call it (perception) an accelerant.

The 17% and 20% drop in the Dow Jones (AMEX: DIA) and S&P500 (AMEX: SPY) pale in comparison to the 26%+ haircuts in the German DAX, London’s FTSE 100 and France’s CAC 40. Hong Kong’s Hang Seng is down 33%, Russia’s RTS had lost as much as 55%. Russia and Hong Kong even suspended trading for a period of time to break the downward momentum.

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French, Belgian and Luxembourg authorities had to rescue Dexia, a French-Belgian lender, with a $9 billion cash infusion. Dexia got into trouble through its U.S. bond insurance unit FSA which started failing when borrowers could not make their repayments. Dexia is the world’s biggest lender to local governments. Now local governments get to return the favor.

Fortis, Belgium’s largest bank and the first of Europe’s big cross-border banks to flounder, received a lift to the tune of $16 billion from the governments of Belgium, Luxembourg and the Netherlands. The three governments shored up its balance sheets and partially nationalized Fortis.

In record speed, European regulators approved a rescue plan for Britain’s Bradford & Bingley. Uncertainty over its future prompted savers to withdraw millions of pounds. The mortgage bank is being nationalized and wound down with part of its business being sold to Spain’s Santander Abbey.

Germany’s Hypo Real Estate, a bank with a $560 billion balance sheet, will require serious help to prevent it from collapsing. Financial institutions have yet to find a solution for the Munich-based commercial property lender. Hypo needs about $50 billion to stay afloat.

In its short 96-day life as an ETF, the SPDR S&P International Financial Sector ETF (AMEX: IPF) was sheltered from a large portion of the financial carnage. IPF has shed a mere 10%. Other international financial ETFs weren’t as lucky. The iShares Global Financials (NYSEarca: IXG) is down 40% for the past 12 months right in line with the performance of the Claymore/Clear Global Exchanges, Brokers & Asset Managers (AMEX: EXB) and WisdomTree International Financial (NYSEarca: DRF).

Europeans believe that nationalizing ailing conglomerates is the right plan of attack. The U.S. prefers to sustain financial institutions with a plan to replace toxic debt with “good” money. In essence, nationalization means that the government takes control, fires the management, takes control and turns a profit eventually (at least that’s the plan), all in exchange for instant cash.

According to the Bundesbank (German equivalent to the Fed), the collapse of Hype Real Estate could have incalculable consequences on the whole of the German financial system. It seems like contrary to the “everything will be fine” attitude displayed by U.S. CEOs (at least initially), Germans know not to underestimate the problem.

Amid all the news, broad European ETFs have suffered violent sell-offs. The European equivalents of Wall Street are covered in red. iShares MSCI EMU (NYSEarca: EZU), iShares S&P Europe 350 (NYSEarca: IEV) and Vanguard’s European ETF (NYSEarca: VGK) all have shed around 35% in the past year.

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The narrow First Trust DJ STOXX Select Dividend 30 (AMEX: FDD) clocks in as worst in class performer, down 50%. FDDs 5.71% yield does little to comfort investors. The Dow Jones EURO STOXX 50 (NYSEarca: FEZ) was able to somewhat soften the blow as best in class performer, followed by the Dow Jones STOXX 50 (NYSEarca: FEU), both down about 33%.

So far, rescue efforts have been piece work. Europe has yet to find a system-wide solution. Calls for a single European financial regulatory body are growing louder. Further fall-outs seem as inevitable as a pregnant woman’s eventual delivery. One of the issues will be to get all European Union members to agree on a common denominator.

Unfortunately, there is no place to hide. To quote Warren Buffett "it's when the tide goes out that you find who's been swimming naked". Broad International ETFs offer no shelter. Performance of the iShares MSCI EAFE (NYSEarca: EFA) and Vanguard All World ex US (NYSEarca: VEU) clearly shows that the world's gone swimming, naked!

Even one of the few "life jackets", the ProShares UltraShort MSCI (AMEX: EFU) is loosing air as another global epidemic, the ban of short sales, is taking hold.