Reading a UBS research report, this quote from Alexander Kobler is poignant,

"The only thing we have to fear is fear
itself.” These were the pithy words Franklin
D. Roosevelt used to give courage to the US
population during the dark days of the second
world war. Many market participants
could do with some encouragement in the
present financial crisis. not least the surviving
investment banks. In just six months we
have seen the takeovers of Bear Stearns and
Merrill Lynch and the bankruptcy of
Lehman Brothers, leaving only two of the
five traditional US market leaders still standing.
The kind of encouragement they need
is a strengthening of their capital bases, as
do many smaller banks.
are also taut and in need of soothing.
The major markets have lost over a
quarter of their value this year and seem to
be in free fall. The order of the day has to
be to stay calm. Investors who have kept
their equity weighting within their longterm
risk capacity have no need to act
immediately. Anyone trying to reduce
excessive holdings after holding back until
now is going to be hit hard. Looked at the
other way round though, it also seems too
early to be getting into the market, except
for very trading-oriented investors.
We are in the final stages of a far-reaching
purge in the financial sector. "

So, there will be a buying opportunity for equities for the long term in time to come. Meanwhile the volatility will suit 'trading orientated investors.'