NEW YORK (Fortune) -- Forget all those rational explanations about why foreign stocks markets, especially in Asia, have been melting down for two days. Despite what you've read, seen and heard, those declines weren't caused by fears of what a recession in the U.S. would do to the profits of companies whose stocks trade in places like India, China and Russia.

Rather, the meltdowns were flat-out market panics, where rationality gets tossed out the window as everyone tries to head for the door at once and gets trampled. Go-go markets, especially in Asia, had risen to ridiculous heights - they were going up because they were going up, and momentum fed on itself. Now, they're going down because they're going down, and momentum is feeding on itself again.

The fact that the Federal Reserve Board announced an emergency cut of 0.75 percent in short-term rates shows that the Fed thinks the problem is a market panic rather than economic fundamentals. Normally, the Fed would have waited until mid-day next Tuesday - the second day of its scheduled two-day meeting - to announce a rate cut. Announcing an out-of-schedule cut today before the stock market opened shows that its motivation is to calm the markets rather than to reinvigorate the U.S. economy.

Here's why. First, it won't be clear until the summer whether a recession is in fact underway in the U.S. Even though the nation's economy seems likely to have shrunk in December, there's no such thing as a one-month recession. "A recession is a significant decline in economic activity spread across the economy, lasting more than a few months," (my italics) according to the definitive authorities on such things, the business cycle dating committee of the National Bureau of Economic Research.

Second, even if you believe that the Fed's cut in short-term rates will stimulate the economy, that won't happen overnight. If you took a Fed economist out for a few drinks and promised not to quote him, he'd tell you that the benefits of a cut take at least six months to percolate through the economy. There have been market panics and freeze-ups all over the world since last summer, when the junk mortgage meltdown in the U.S. started gathering speed. These have been confined mostly to the debt markets, which - unlike the Dow Industrials - don't resonate with most people and can't be summed up neatly in one familiar number, as the Dow is.