Yesterday, I spoke with the CIO of the Xerox pension fund, Carol McFate. We were preparing for our ai5000 conference and an interview in the coming weeks, and she made what might have been the understatement of the day: “There is still a lot of uncertainty in markets.”

This was at 12:03 (EST). The market began its decline around 3:00. A bit of luck on Carol’s part, but the fact remains – each day, still, we are only hours away from collapse.

The reasons for this uncertainty are varied, just as the reasons for yesterday’s Dow Jones ride-from-hell was. Besides the apparent technical glitch and the accompanying halt in trading of Proctor & Gamble stock, there is one fear that has been in the newspapers nearly every day this year: Greek debt.

In June of last year, we wrote on the impending collapse of Dubai’s various sovereign wealth entities. When Dubai finally hit the wall in late November, all eyes turned towards the next potential default, which conventional wisdom said was Greece. Five months, riots, parliamentary votes, and an unhealthy dose of brinksmanship later, it seems like Europe is on the precipice of bailing out one of its own.

The question, however, is whether any bailout and corresponding austerity measures in Greece will calm world markets. Frankly, I see no reason why this alone would. When Dubai went under, markets went looking for the next potential victim. They will likely do the same now. The remaining PIIGS – Portugal, Ireland, Italy, and Spain – will come under even more scrutiny, and this merry-go-round will start all over again.

How will it end? I have no idea – and anybody who tells you they do is lying. I suspect that if the European Union succeeds in bailing out Greece, they will be forced to do the same for all their members – especially if they want the EU and the Euro (which also took a beating yesterday) to be in existence in a year. I suspect that until solid growth figures return to Europe and America, and unemployment rates are lowered, such fears will continue (this is not a controversial opinion). The solution (more controversial), then, in my eyes– and this will surely offend Tea Party-ers everywhere – is continued government involvement to provide cheap capital and a safety net of sorts. There are always issues with the inefficiencies of government intervention, yes, but I suspect that the opposite – no government involvement at all, letting the markets fend for, and devour, themselves – would, for now, be much, much worse.

If you disagree, think of the alternative. Imagine if governments from across the globe raised interest rates and stopped supporting faltering institutions and countries that were deemed ‘too big to fail’. Available capital, scarce as it is, would likely dry up once more; business’ would be strangled of their lifeblood; hiring would cease. If growth is the way out of this cycle of uncertainty, then it seems to follow that a government withdrawal from markets is not the answer. Cheap capital provided by the government does not entirely stop market uncertainty – but the alternative, in theory, seems much worse.

As I write this, America’s April unemployment numbers creep across the television screen. Almost 290,000 new jobs were created in April, but with more people beginning to look for work, unemployment was up 0.2%, to 9.9%. Carol McFate is right – these are uncertain times still. Act accordingly.