Panic has gripped world sharemarkets amid the prospect of a prolonged global recession, with no end in sight to a rout that is threatening to eclipse that of 1987.
More than $95 billion was wiped from the Australian market yesterday in its biggest one-day fall since Black Tuesday 21 years ago - almost to the day.
Contagion spread from Wall Street, as investors ripped money out of shares to seek the safety of cash and government bonds.
The selling continued throughout Asian and European trade, with Japan's Nikkei index dropping almost 10pc.
Australia's sharemarket has fallen 42pc since reaching an all-time high in November.
"It's pure panic - people are just getting wiped out left, right and centre," Aequs Securities' institutional dealer, Ric Klusman, said.
"The Australian market is just getting slaughtered."
The social cost from the falling market will dwarf that of 1987.
Then, before the introduction of compulsory superannuation, most Australians had little direct exposure to volatile markets.
"It is a much more dramatic issue for everyone, particularly mums and dads on the street who don't know how to react because they haven't been through this before. People are drawn into this whether they like it or not," the managing director of SuperRatings, Jeff Bresnahan, said.
Superannuation funds have lost about 7pc of their value in just eight trading days, taking losses on a typical fund to about 20pc over the past year.
About 80pc of Australians have a balanced super fund, exposed to Australian and international shares, and more than half of all super is invested in the sharemarket.
"It's a bloody big number - and that's an understatement," Mr Bresnahan said of the losses from super accounts.
"After the end of this week you would be an incredibly brave … person to try and predict anything."
Mr Bresnahan said the meltdown had changed retirees' "whole financial position in a matter of weeks", forcing them to cut their spending in order to ensure adequate funds for retirement.
"You are entitled to be worried but the trick is not to rush into something that is inappropriate - try not to panic, basically," he said.
The benchmark ASX200 index plunged more than 8.3pc, or 360.2 points, to 3960.7 yesterday.
The Australian dollar tumbled US3.3 cents to US65.95 cents last night.
European markets opened sharply lower last night, with Britain's FTSE 100, Germany's DAX index and the French CAC index all down nearly 10pc in early trade.
A host of brokers and strategists described the meltdown as worse than the 1987 crash. Then, the fall was brutal yet relatively swift.
"This time it is just contagion and … and it is rooted right through the whole economy," Mr Klusman said.
The fall in sharemarkets comes despite a series of interventions by the world's top regulators this week.
At the core of the problem is a crisis of confidence in world banking. Even as authorities plan to pump billions of dollars into the banking system, financiers remain reluctant to extend loans.
Investors remain pessimistic about the meeting of treasurers and finance ministers from some of the world's 20 largest economies this weekend - including the Treasurer, Wayne Swan - arriving at an immediate solution.
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