For what it's worth

If you own stocks or mutual funds DO NOT SELL into a panic.

http://online.wsj.com/home/us

If you have cash to spare, BUY stocks or mutual funds gradually and steadily during panics. Actually, you should be doing that in good times and bad times. The difference it that it's really advantageous to buy during bad times. The problem is that neither you nor anyone else knows precisely how long the bad times will last.

Split your spare cash into 12 or 24 or 36 or 48 chunks depending on how conservative you want to be and buy some stocks each month in a disciplined fashion. Or increase the deduction that's going to your 401K plan if you work for a company that has such a plan. That's always a good idea if you can spare the money, but when the market is falling it is an especially good idea.

If you're under about 50 years old all of your investment dollars (except for your house) should be invested in stock mutual funds except for the amount of cash you need to live on for six months or so in the event you lose your job. If you're 60 years old you still should have almost all of your investment dollars invested in stock mutual funds.

We're almost surely not going into a new great depression. The government is stupid (nearly all governments are stupid nearly all the time), but the government is not that stupid, and the economy has changed a lot since the 1930's. Now, in 2008, almost half of the economy is supported by federal, state and local government spending of one sort or another. That's a bad thing for growth almost all the time, but it's a good thing if the world economy really falls apart because it means demand in the US cannot collapse completely as it did in the 1930's.