If the reinsurance giants begin to topple, the panic will turn to economic apocalypse. During the Great Depression, worldwide GDP fell 15 percent. This crisis, by my estimation, could shock global GDP by up to 35 to 40 percent. Standard countercyclical monetary policy is not of much use here, as most major central banks, including the Fed, the European Central Bank, and the Bank of England, have cut interest rates to zero since the economy began lagging.
