The US sharemarket's near 9 per cent tumble on Monday provided as much evidence as anyone needs that Newton's law of gravity is still functioning. Gains made last week were quickly lost without any meaningful addition to news.

In the current environment we don't need a major investment bank to fall over to send the market into a tailspin. The trigger can be a restatement of old news or a simple statement of the bleeding obvious.

Australia is no different. Yesterday our market appeared to be taking the US falls in its stride for most of the day: the index was off about 2 per cent until 2.30pm. But when the Reserve Bank delivered its monetary statement the Australian market quickly moved in a southerly direction.

RBA governor Glenn Stevens dropped the cash rate by 1 percentage point, what most economists had forecast, and his commentary was as we have come to expect - subdued without being alarmist. He spoke of below-trend growth in world economies and a fall in commodity prices. But we knew that. He forecast that, with confidence affected by the financial turbulence and a decline in the terms of trade now under way, more cautious behaviour by households and businesses is likely to keep private demand subdued. No surprises there.

The rate reduction is not as great as some optimists were hoping but it's realistic, given our economic landscape.

And the good news is that Stevens has fuel left in the tank. After yesterday's cut the cash rate is 4.25 per cent, which allows the central bank plenty of scope to beef up the already expansionary monetary setting.

Over the ditch in the US, Stevens's equivalent, Federal Reserve chief Ben Bernanke, has no such luxury.

His speech on Monday was considered the primary reason the US market went into afternoon freefall, but he was only stating the obvious - the Fed has little room to move on rates.

Bernanke made a valiant, but fairly ineffective, attempt to convince the market there were some less conventional weapons left in the arsenal. But it was like running out of nuclear missiles and pulling out the slingshot.

The market seemed unconvinced that Bernanke's plan to buy US Treasury securities could deliver the same economic stimulus as cutting rates.

The former could help provide liquidity to unblock the arteries of the financial system but it won't put money into the hands of consumers like a good old- fashioned interest rate cut will.

And he had to concede that the US economy would probably remain weak for a time.

If that wasn't enough, the National Bureau of Economic Research declared the US had been in recession since the end of 2007. This seemed only to add to the jittery climate.

Meanwhile US traders seemed content to take profits on the gains made last week rather than take the view that this was the tentative start of a recovery in the sharemarket.

It is clear from the pattern of trading this week that no one is prepared to call the bottom of the equities market. Volatility remains the order of the day as the actions of both US and Australian consumers show they are far too gun-shy right now to spend their way out of the economic mess.

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The new chief executive of Qantas, Alan Joyce, might have been handed a hospital pass when it comes to the near-term performance of the airline, but during his reign we could well see Qantas become a part of the industry consolidation that his predecessor, Geoff Dixon, dreamed of.

After years of lobbying, Qantas yesterday came one step closer to freeing up the onerous legislated ownership provisions.

The green paper released by the Federal Government said it would look at removing restrictions that limit any foreign airline from owning more than 25 per cent and bring them into line with the general foreign cap of 49 per cent.

It will pave the way for some kind of merger with a foreign airline and allow Qantas to place new equity to an offshore carrier.

Qantas can use this change to get in on the global consolidation that it has been watching as a bystander for years.