It's been a day of fraught trading on the world's stock exchanges. The FTSE100 ended down 145 points at 5,261. To put that into perapective, as recently as the 19th May, the FTSE 100 was trading at around 6,300 so the market has shed more than 1,000 points in less than two months, a massive decline and clear evidence we are in a "bear market".
On Wall Street, it's been the same story of gyrating indices. In mid-May, the Dow Jones was pushing 13,000. Tonight, it's trading at 11,100 so that's a loss of near 2,000 points in two months.
Oil, after easing back to the mid-$130s earlier in the week, has surged back to record levels follwing the Iran missile test.
Clearly, we face a long period of economic uncertainty with all that flows from it.
The longer-term question and the one that's bothering me is how will we get out of this ? There are historically two responses - one is to raise public spending and the other is to cut spending and raise taxes. The object of both policies is to revive economic activity either through publically financed infrastructure improvements or via consumer spending.
The view in the blogsphere is that the banks will start to lend again and oil will either fall or stabilise but this is, I think, based as much on hope rather than any real evidence. Those who talk about the bargains emerging in the property market conveniently forget that few will want to get back into the market after the battering of the past few months.
At the moment, I just don't see how the global economy will improve with food and fuel prices still rising so quickly. I don't know what, if anything, Governments can do to change the situation.
We still face many more days on the white-knuckle ride.