World markets from Tokyo to London fell dramatically today on concerns about the US economy and potential recession. In the worst day of trading since 9/11, markets demonstrated severe pessimism for US economic policy and the ability of this Administration to resolve current economic woes.

Fears about President Bush’s economic stimulus package sent markets around the globe tumbling, signaling a global lack of confidence in the ability of the Administration to cure the present conditions of the US economy. Some markets dropping more than Six percent of their value, solely on concerns that the US is headed into a deep recession.

US markets were closed today for the Martin Luther King holiday, which celebrates the life of the slain civil rights leader. With the New York and other markets shuttered for the day, the American financial community was spared the effects of the global market plunge.

Tomorrow, Tuesday, as US markets open, it is likely that no matter what happens earlier in Asian and European bourses, the US markets will take a serious decline in value. We’re predicting a 450 or greater drop, most of which will take place upon opening at the New York Stock Exchange. Other markets, such as the NASDAQ will also take serious drops.

We believe these drops will not be long-lived as this global financial hiccup is a combination of a correction and an emotionally driven catharsis.

We remain concerned, however, that such emotions can lead to unfounded panic and that unlike the New York Stock Exchange and some of the European bourses, many markets do not have the automatic trading brakes which halt trades if the market moves downward too quickly. We’re also concerned that some traders around the world will not understand the automated trade stops and see a cessation of trading, even a brief one, in US markets as a collapse and drive their own markets lower.

A panic could occur, with major sell-offs in world markets, signaling a global, rather than US recession. Should a serious panic take the markets, with more than a 20% drop in a single day, we could see the beginning of a financial calamity.

We’re monitoring world currency markets to see how foreign national banks deal with their US dollars. That’s going to be the key indicator of where US markets are headed in the next few weeks or months. If these banks dump US dollars in favor of other currencies, such as the Russian ruble, Euro or British Pound, it will signal an international lack of faith in the US economy. On the other hand, if they buy US dollars, it will be an effort to strengthen the Dollar and will show foreign markets as well as our own, that the US economy still has serious strengths and global support.

China will play a pivotal role. If the Chinese Central Bank fails to support the US economy in this, China will lose one of its greatest trading partners and the largest market for its goods on the international stage.

Only time will tell.