Investors are panicking, with world markets in freefall after a gloomy Federal Reserve outlook yesterday renewed fears of a global recession.

Wall Street is down more than 3%. As Christine Hauser reports in The New York Times:

    “The downcast mood appeared to be reflected across the board. Stocks fell in Asia, Europe and on Wall Street, where equities were down more than 3 percent as the market closed. Bond prices soared for a fifth consecutive trading session, pushing the United States benchmark yield to new lows. Commodities such as oil and precious metals retreated, as the dollar ground higher.”

Investors are moving out of stocks and investing in the US dollar, writes Brendan Conway in The Wall Street Journal. He explains some of the other defining factors in the latest crash:

    “A weak reading on manufacturing in China contributed to the slowdown fears. Adding to the grim mood was a lack of appreciable progress in containing Europe’s debt crisis, which has weighed on markets for months”

The Aussie dollar plunged to 10-month lows this morning, tumbling below parity, explains Thomas Hunter in The Age:

    “Overnight, the Australian dollar slipped to 96.92 US cents, more than two and a half cents down from yesterday’s 5pm close of 100.18 US cents, and off five US cents since Wednesday. The last time the local unit languished in the 97 US-cent range was in early December, 2010. The dollar was recently changing hands at 97.4 US cents.”

World Bank president Robert Zoellick demanded the major economies take decisive action. ”Europe, Japan, and the United States must act to address their big economic problems before they become bigger problems for the rest of the world,” said Zoellick, at the beginning of the annual World Bank and IMF meetings. ”Not to do so is irresponsible.”

With the debt and deficit we have and the expenditure and carbon tax on the horizon, I dont see us pulling out of it for a second time.

Hmmnnn....is it time to start stocking up on non-essentials and non-perishables - such as toilet paper - in case 'food stamps' don't suffice!?

I mention TP in particular - since it was reportedly hard to get during the 1930's depression...

what can they do???..they have tried bailing countries out it hasnt worked..Greece is in freefall.. Ireland.. are offering b uy one house get one free..where are the Arabs in all this? they seem to be the only ones spending huge money on the ridiculous

Abolish Greed, inequality and competition - that got us to this point in the first place - the worlds decent people refuse to compete and refuse to be exploited or competed against.

So, are world leaders and economists ready to admit that the core of the global financial crises are: the exponential polarisation of income, wealth, power, opportunity , resources and debt, and; reckless under-regulation of corporations, markets, private equity and other parasites!?

That and the irrational worship of the insatiable and destructive Growth Fairy!