MARKETS UNSTABLE, CALMING PILLS REQUIRED – AT 8:24 A.M. ET:  From the Washington Post:

TOKYO — A frenzied sell-off caused Asian stocks to nosedive early Tuesday, and though most major indexes recovered slightly toward the close of trading, the latest day of losses extended fears of a global economic downturn.

Japan’s Nikkei 225 index fell more than 4 percent within the opening hour and dropped 1.68 percent for the day, closing at 8,944.48 — its first finish below the 9,000 mark since mid-March. South Korea’s Kospi index sustained massive losses in the opening hours, at one point plunging more than 9 percent and bringing a brief halt to trading. But the index clawed back and finished with losses of 3.64 percent for the day.

European markets fluctuated in morning trading, falling sharply at first but then largely recovering. By midday, the major indexes were all within one or two percentage points of where they had opened Tuesday morning--with London’s FTSE and Germany’s DAX slightly in the red, but France’s CAC 40 and the Stoxx Europe 600 edging into positive territory.

U.S. stock futures were also volatile, but edged up significantly within two hours of the opening bell.

The latest Asian market chaos heightened the urgency facing the U.S., which on Tuesday will hold a Federal Reserve meeting to discuss possible new monetary easing measures. In the meantime, Asia is offering proof that no part of the world is cut off from the problems gripping the U.S. and Europe, particularly as foreign investors pull their money from Asia’s stocks and flee to safe havens, like Treasuries and gold.

COMMENT:  I wouldn't be shocked to see some gains in the U.S. stock market today, as bargain hunters move in, although panic and fear could move the market in the other direction.

But there is a worldwide economic problem, probably the greatest since the Great Depression, and President Hope 'n Change in the White House continues to give political speeches and go to fundraisers.

August 9, 2011