Some selected quotes from the FT on today’s markets, sum it up:

Panic grips credit markets | ft.com

• Yields on short-term US Treasuries hit their lowest level since the London Blitz
• gold had its biggest one-day gain ever in dollar terms
• All thought of profit was abandoned as traders piled in to the safety of short-term Treasuries
• the yield on three-month bills falling as low as 0.02 per cent – rates that characterised the “lost decade” in Japan.
• The last time US Treasuries were this low was January 1941.
• the so-called Ted spread, which tracks the difference between three-month Libor and Treasury bill rates – moved above 3 per cent, higher than the record close after the Black Monday stock market crash of 1987
• Some analysts have criticised US authorities for adopting an arbitrary approach to rescues – saving AIG, but not Lehman – that was impossible for investors to predict and therefore did not boost confidence.

Hogarthian image of the “South Sea Bubble”, by Edward Matthew Ward, Tate Gallery