Last night at 8 PM I checked Bloomberg and it provided an early warning of the Monday meltdown we'll suffer through today. The Wall Street Journal [subscription required] reported that as of 7:57 a.m., the Dow Jones industrial average futures were 90 points lower, S&P 500 futures were down 9.8 points at 1,376.00 and NASDAQ 100 futures were off 14.75 points at 1,711.50.

This in sympathy with another plunge in global markets. According to the New York Times [registration required]. Here's a quick summary of the global carnage heading our way:

• Nikkei 225 down 3.34%;
• Hong Kong's Hang Seng index tumbled 4% to its lowest since mid-December;
• Australia's stock market -- which had hit records last month -- fell for a fifth day, sinking 2.3%;
• South Korea's benchmark index dropped 2.7%;
• Indian stocks fell 4.2%;
• Britain's benchmark FTSE 100 down 1.5%;
• France's CAC 40 sliding 1.8%; and
• Germany's DAX sinking 2.1%.

What's going on? Only the big players know for sure and they're not talking. My hunch is that fear is feeding on itself. Traders who borrowed money to finance purchases are afraid they won't be able to pay back their loans. So they're selling other assets to raise cash. The Yen Carry Trade is one such leveraged bet. Investors have borrowed yen at Japan's 0.5% interest rates to buy higher-yield assets elsewhere. But as the yen appreciates, the profits from these carry trades are eroded, prompting some investors to return yen loans by selling what they see as their riskiest trades. This will strengthen the Japanese currency and keep the cycle going.

When will it end? Not for a while. One of the problems is that nobody seems to know exactly how big is the global wager on this Yen Carry Trade -- on which I posted last week. But it is known that there is a record $286 billion worth of stock margin debt in the U.S. that will need to be repaid. And the cash to do that will come from selling assets.

I could see the Dow dropping 20% before the fear is washed out of the global markets. And as I've posted many times, $1.3 trillion worth of subprime mortgages are scaring investors who realize that many won't be paid back and the houses backing them have declined in value. This morning, one of these companies' stocks -- New Century Financial Corp. (NYSE: NEW) -- is down 56% in pre-market -- for reasons I described here.

What should you do? If you have a margin call, your broker will sell stock to finance repayment of the loan. My hunch is that it's too early to look for bargains -- the adage about catching a falling knife comes to mind. If you can wait five or 10 years for your portfolio to rebound, then count your other blessings.

Because a rising stock portfolio is not likely to be one of them.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter He has no financial interest in New Century.