The extraordinary swings in global markets over the last week or so were typified by yesterday's extreme movements - the FTSE100 spent most of the morning up 100 points, before dropping back 40 and then rallying again and more. In the US Dow futures fluctuated over a 300 point range before the open.
Perhaps markets tend to overshoot in both directions, particularly on the way down. Indeed, one US commentator noted that the market is currently deciding to "shoot first and ask questions later". This seems especially true with regard to the latest concerns on the French banks, even though the difficulties are being vigorously denied by the banks themselves, the French government and even the three credit rating agencies.
Leading up to the weekend, fears had heightened over the two most important words on investors' lips at the moment - debt and growth.
Amidst the turmoil, there have been two notable positives although, as yet, they have failed to halt the slide.
The European Central Bank decided to enter the market to support Spanish and Greek bonds. All things being equal, buying the bonds of these countries will push up the price and the yield will therefore fall. This in turn means that the issuer of the bonds (the countries in question) will be able to afford the repayments on these loans and - equally importantly - can continue to come back to the market to raise further funds. At, say 5%, this is sustainable - at 30% plus (Greece) it is most certainly not.
The US Federal Reserve followed up with an update of its current thinking.
The most striking part of the announcement was that it said that interest rates were likely to stay at their current and historically low levels until at least mid-2013 - almost two years away. In the US this is an unprecedented move and paves the way for an accommodative monetary policy whilst also, to some degree, removing one plank of uncertainty for investors to worry about.
The Fed said further that it would "continue to assess the economic outlook" and employ its policy tools as appropriate - thus leaving the door ajar for a third round of Quantitative Easing if circumstances dictate. In addition, it was considered that the continued easing of policy, especially for those investors chasing yield (or dividend return) would play into the hands of riskier asset classes - such as shares, where prices reacted accordingly.
Even so, the actions of the ECB and the words of the Federal Reserve (subsequently backed up by the Bank of England) give some solace to investors desperate for some words of comfort. Of course, the underlying problems of debt still remain. Weak economic growth in the affected areas will also make paying down this debt more difficult, which is why markets may not move on in any meaningful way until concrete plans are put in place to deal with these debts.
Markets will continue to be volatile while this fragility of sentiment remains, and the pressure is now on governments to prove that the required austerity measures are not beyond their reach.
Alongside this, however, blue chip companies generally continue to be in good shape, taking the current environment as an opportunity to run down debt and/or hoard cash. There are a number of companies with a worldwide reach and the ability to generate strong, stable earnings which are therefore looking even cheaper on valuation grounds.
Investors should think carefully before bailing out now, especially as by selling they will be crystallising a capital loss. The indirect hits to our pensions and savings plans are currently painful, but at least in the hands of the professionals - who themselves will be considering that the quality of certain blue chips could even provide a buying opportunity for those of a steely disposition.