Well, it's finally happened.

The reality of the three government crises (budget and debt ceiling in the US, governmental collapse in Italy) is hitting home.

And markets are finally feeling it.

Over the weekend, the US Congress failed to agree on a budget, and the Italian government lurched towards collapse, as Berlusconi's party said it was withdrawing from the coalition.

US futures are sharply in the red with Dow futures off 100 points.

Here's a look at the Dow futures drop from FinViz:

Meanwhile, Japan is really taking it on the chin.

The Nikkei is off nearly 2%.

And dollar-yen is back below 98, as the yen surges thanks to its role as a safe-haven.

For more on what's going on this weekend, see here.