The Great Panic of 2008 is here. And people will read, learn and analyze this one for the rest of time.

This is a pure and total loss of confidence folks. A loss of confidence in our markets. A loss of confidence in our leaders. A loss of confidence in our Justice Department, our media and our laws. And a loss of confidence in capitalism itself.

The actions of our incompetent, clueless and corrupt leaders these past few weeks have made this crisis and crash worse than even I expected. Now the whole world is New Orleans. Now the world sees the incompetence, cronyism and corruption that came to infect Washington D.C., and the greed that infected the world

Get popcorn. But get real. The events of the past few days will change your life direction. The world will never be the same.

From Websters:

Main Entry: panic

Function: noun

Date: 1708

1 a: a sudden overpowering fright ; also : acute extreme anxiety

b: a sudden unreasoning terror often accompanied by mass flight panic in the streets>

c: a sudden widespread fright concerning financial affairs that results in a depression of values caused by extreme measures for protection of property (as securities)

From Brett Steenbarger, Author of The Psychology of Trading, on TraderFeed:

It looks like the chart of a fallen bank, but it's actually the daily price chart of the S&P 500 Index futures as of this morning's pre-opening trade. Market history is replete with instances of stock market panics. Since the Great Depression era, we've had panicky periods of selling, but no labeled "Financial Panics".

Panic, psychologically, connotes a loss of orientation and an overwhelming sense of anxiety, just as Depression connotes hopelessness and an overwhelming sense of loss.

It is interesting that we use these psychological terms to label periods in financial history, but it is fitting.

When institutional investors lose confidence in the financial system, what else can they do but hit the panic button, sell their assets, and do their best to preserve capital?

When individual investors see their retirement assets--from their homes to their bonds to their stocks--down more than 20% and in seeming free-fall, it's understandable that psychological depressions become financial ones.