"Red lights flashing through the windows in the rain"

Global equity markets are in free fall. On Monday German, Indian and French equity markets were down 7% and U.K., Hong Kong, and Singapore were off 6%. Halfway through the Tuesday market day in Asia equities there have generally fallen another 5%. Forecast for the U.S. opening Tuesday morning can only be grim.

The subprime straw has unleashed a domino effect of global imbalances. Giving $800 to every American taxpayer in a few months seems sort of silly at the moment in light of what is unfolding. Listening to Hillary Clinton use this debacle to make some "savvy" point brings a new dimension to political superficiality. With the global financial leaders in Davos jockeying for position to demonstrate how astute and somber, or maybe just sober, their pronouncements can be, we can expect no leadership forthcoming. We have now been pushed into what might be a rational market adjustment with an associated panic, or perhaps it's a calamitous market panic that will unwind at levels that would not currently be viewed as rational.

All together now

"Don't let it bring you down. It's only castles burning..."