What now?

Brendan McDermic/Reuters

That depends on figuring out what has already happened.

Global credit fears and worries of a U.S. recession pushed the Dow to its worst ever intraday point loss and below the pivotal 10,000 level for the first time since March 2004.

At least some business news folks are reporting that the recession is here.

Stocks plummeted even after Congress passed a $700 billion financial rescue package last week and the Federal Reserve announced a series of measures to add cash to the financial system.

“The problems just don’t evaporate because somebody signs a bill,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business…“There is a palpable sense of fear about how bad things could get,” said Michael James, senior equity trader at Wedbush Morgan Securities. “People are protecting themselves against the possibility things could get a lot worse short term.

This started badly enough, but the rapid meltdown is fear-driven. Perceptions become reality when emotions drive erratic and impulsive decisions.

Global markets tanked on Monday after European governments were forced to come to the rescue of financial institutions for the second weekend in a row. The turmoil raised expectations that Europe will see a U.S.-style financial rescue.

London’s FTSE fell 7.9% for its third-worst one-day drop, Germany’s Dax ended down 7.1% and France’s CAC 40 suffered its worst plunge ever. Russia halted trading three times before its markets closed down nearly 20% each.

“There seems to be this snowball effect. We’re down because of Europe and they are down because of us,” said Pado.

Isn’t this what we were supposed to have been rescued from…last week…by Congress?

Instead, a crisis that began with the overheated U.S. property market and the $11 trillion U.S. mortgage market showed signs of rocking investor confidence worldwide more violently.

“The ground underneath our feet is moving like an earthquake,” said acting U.S. Treasury Undersecretary for domestic finance Anthony Ryan.

What to do about all this? The timing is providential, with the synod of bishops just convening around the topic of building solid foundations not on worldly gain, but on the word of God (see post below, and this).

Some on Wall Street have already started looking there.