Small-cap stocks remained unsettled this morning, unable to embrace Friday’s rescue plan package as equity markets around the world seized up and credit pipelines remained clogged despite massive additional liquidity injections this morning by the Federal Reserve. At 9:50 a.m. ET, the Russell 2000 (NYSE:IWM) was down 19.38, or 3.13%, at 600.02, slipping to the lowest point on intraday charts since May 2005.

In Europe, extraordinary measures were taken over the weekend on the banking front, with France’s BNP Paribas buying assets of beleaguered Fortis, while in Germany a rescue deal for Hypo Real Estate was sweetened by another 15 billion euros of liquidity, adding to an earlier pledge of 35 billion euros.

Everyone has been talking about the Federal Reserve slicing the Fed funds rate, but that rate has already been trading well below the current 2% rate in the market. This morning, the Fed increased the size of its cash auctions and also offered banks interest accrual on reserves. Stock index futures did pull off the overnight lows heading into the open on the Fed injection news, but the inability to stabilize financial markets in the direct aftermath of the $850 billion financial bailout bill Friday reflects just how deep the crisis is running.

Looking at market action around the world, European shares were off nearly 5% into the U.S. stock market opening. Elsewhere, Russian stocks tumbled some 15%, prompting various exchange trading halts. Japan was down 4.9%, Hong Kong off nearly 5%, China down 5.1%, Taiwan down 4.1%, Australia off 3.3%, Singapore down 5.6%, South Korea off 4.2% and India down 5.7%.

Market research experts at Goldman Sachs slashed their economic forecast for growth and interest rates “substantially” in a report issued Friday afternoon. Goldman said “The recession that we have been forecasting now looks likely to be deeper and longer, taking the unemployment rate to 8% by late 2009 and pushing the . . .

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