20110905 dax market germany stock
The day's performance of the DAX Index is displayed on the electronic board at the Frankfurt Stock Exchange in Frankfurt am Main, Germany. - 

JEREMY HOBSON: It was probably a blessing that the markets were closed for the holiday here in the U.S. because it was downright ugly in overseas trading today. September is only five days old, and it's already starting to look like August when it comes to economic fear.

Our New York bureau chief Heidi Moore says we should all buckle up.

HEIDI MOORE: If you want to know what the world economy is going to look like this fall, you could consult the work of the wisecracking author Dorothy Parker. She used to ask: "What fresh hell is this?"

European markets have already started to answer that question today. There are rumors that Italy might get downgraded. That sent the markets into a nosedive. Regulators had to stop all trading of Italian bank stocks.

The panicky mood overseas is going to get worse in September and through the fall, says Doug Roberts. He's the chief investment strategist for Channel Capital Research.

DOUG ROBERTS: It's almost like the European version of the subprime crisis. It had a domino effect with the banking system, with some of the mortgage systems, and then it trickled down the line. That acted as the catalyst for a recession.

To solve those problems will take years. Kathy Jones points out that just because the calendar has ticked over, it doesn't mean the world's economic problems have changed. Jones is a fixed-income strategist with Charles Schwab.

KATHY JONES: There's always a hope -- you hear this often at the end of summer -- that well, when people come back from vacation, the markets will return to normal, whatever that is. But in this case, these are problems that have been around for a couple of years. I think it's going to take a while to work them out.

At least September will give us an opportunity with chances to get started. The real star of the next few weeks will be the Federal Reserve. It's holding a two-day meeting starting September 20th. The subject will likely be employment. The outcome, many are hoping, may be more stimulus.

In New York, I'm Heidi Moore for Marketplace.

Follow Heidi N. Moore at @moorehn