Far eastern stock markets kept on tumbling this morning on fears that the recession will be longer and deeper than hitherto thought, thereby hitting far eastern exporters harder.
Hong Kong's Han Seng index dropped 12% and Shanghai and Tokyo were down 6%, Tokyo hitting a 26-year low.
There were also growing fears that the big banks based there, like Britain's HSBC and Standard Chartered, will have to join their more euro-centric colleagues in raising more capital.
European shares followed suit this morning, with the FTSE 100 down more than 5% in early trading.
The market doesn't like PM Gordon Brown's promise to spend our way out of recession, preferring the option of tax cuts.
All this despite many analysts and fund managers believing that the markets are heavily oversold, even though company earnings forecasts are being reduced -- so placing pressure on their price to earnings ratios and therefore stock prices.
Now either the markets have gone mad or there's something else going on.
Many people are fingering our old friends the hedge funds.
Until recently, the proud boast of the hedge funds was that they had discovered the Holy Grail, the ability to make money when markets went down as well as up -- by short selling, for example.
But the fact is that they made most of their money when markets went up, as they have been doing for the past few years, by borrowing cheaply to buy shares.
They also benefited hugely from the development of derivatives, essentially instruments that enabled you to invest in shares and other securities without need to actually buy them.
Credit swaps and so-called contracts for difference were just two of the ways you could take a big position in a company or a currency and, because of your tiny investment in cash terms, benefit spectacularly when the price rose.
This is akin to spread betting and, as with spread betting, the trouble is that you're still liable for the full amount if the wager goes against you.
Contracts for difference allowed our old friend Robert Tchenguiz to take big positions in the likes of Sainsbury's and pub company Mitchells & Butlers without paying the full amount for the shares.
But when the markets began to slide the banks called in their loans and Robbie had to find the full amount.
This is exactly what is happening to many hedge funds, including newly-famous Russia investor Atticus Capital, co-chaired by the celebrated Nat Rothschild.
Banks pull their loans, worried investors -- who include some pension funds sadly -- pull their money and the unfortunate hedgie has to sell something, anything, to raise the cash to pay them back.
The easiest, often the only, way to raise these huge sums is to sell the shares you hold in the biggest, most frequently traded companies like banks and miners.
This decision to sell doesn't necessarily have anything to do with the company's likely earnings and therefore optimum share price, if such a thing exists.
It's just a fire sale for your own desperate needs but one which can easily spark a chain reaction among other, more conventional, investors who can see their money disappearing.
Banks too, of course, have been suckered into buying billions of dollars of dodgy derivatives but they are being bailed out by governments, most notably in the US through Hank Paulson's $700bn bailout fund.
Even the Bank of England, reluctantly, has agreed to swap mortgage-backed securities, the original cause of the problem, for good old pounds.
But the hedge funds have no such recourse.
Arguably the same process is helping to drive the plummeting oil price -- oil futures for November in the US are trading at $63 despite OPEC cutting production by one and a half million barrels a day.
The hedgies helped to force the price of oil up, now they're having to sell it down.
This process is called, in the fancy way such things are, de-leveraging.
When it's finished the markets will stabilise and eventually start to rise, recession or no recession.
But no-one knows how much more distressed selling there will be.
Some Wall Street analysts are now saying that the intra-day Dow Jones low of 7,773 on October 10 represents the bottom -- the Dow closed on Friday at 8,378.
Many investors would settle gladly for that.
Big week for key US data
It's a big week in the US with quarterly earnings from mobile giant Verizon, part-owned by Vodafone, due today, Procter & Gamble on Wednesday, Exxon, the world's biggest company, on Thursday and oil rival Chevron on Friday.
In addition, there are home sales figures today and home prices and the latest consumer confidence survey on Tuesday.
On Wednesday the Federal Reserve is due to take the knife to interest rates again, probably cutting them to 1%, which is as low, realistically, as they can go.
At the same time the US government is likely to come up with some sweeteners to expedite the proposed merger between General Motors and Chrysler and generally help the ailing car industry.
Home sales and prices are the key data. This crisis began with US mortgages and US homeowners aren't going to start spending again until they think the worst is over.
With detached houses in the Mid West selling for as little as $500 an optimist might say there can't be that much further for them to fall.
It's now reached the point in some areas where it's cheaper for the lenders to give the houses to the occupants than pay to have them repossessed.
But the figures are just as significant for the banks. They have billions, maybe trillions, of mortgage dollars on their books.
Once, if, these stabilise then they can stop writing off capital and look forward cautiously to the day when they can start writing back some value into their accounts.
And lending the money.
Brits give up drinking shock
The Beer and Pub Association reckons that sales of beer fell 7.2% between July and September, 8.1% in pubs, which we've all heard about, but also 6% in supermarkets, where we keep hearing the exact opposite.
So maybe a recession isn't so bad for us after all? Unless you're a pub owner or tenant, of course.
After all the country can hardly be going to the dogs on a tidal wave of alcohol -- as many papers suggest -- if we're actually buying less of the stuff.
It's the same with cars. Yet another report came out the other day saying that the Government hadn't done enough to cut car use, by measures like road pricing and investing more in trains.
But sales of new cars are down by at least 20% this year, much more for gas-guzzling 4x4s and the like. If chancellor Alistair Darling brings in his threatened measure to increase the tax on bigger older cars next year, sales of these will presumably take a powder too.
So we might have a healthier, greener, although undoubtedly poorer, Britain.
Stephen Foster is a former news editor of Campaign, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog www.editco.net and Politics of the Media for Brand Republic.
This article was first published on brandrepublic.com