Consider the Catalyst
Today's stock market plunge was triggered by concerns in the corporate debt market. The subprime fears have been known for months, but a spread into the corporate debt market is the current big concern. The would-be deal that triggered the stock drop was the failed attempt to securitize the least desirable part of Chrysler as Cerberus completes its buyout of the company. Potential investors demanded too high an interest rate for this junk debt.

Many companies took a look at Chrysler before it was finally sold to private equity firm Cerberus. The market's today made a big downward move based on assumptions - i.e. that no more corporate debt is going to be bought so credit will stop - drawn from the inability to sell the worst part of a company few investors wanted. I think the market overreacted. Crap is crap whether the market is in a prudent mood, like the past month, or a freewheeling mood, like the past several years. I think it's good this deal could not get done. It is also good that the ten-year Treasury is 4.78%, as this will help ease pressure on the housing market.