The next item we need for this to become a full fledged panic is a market halt.  With credit markets more or less frozen and now "risk free" assets like money market accounts halting redemptions, an equity market halt would complete the trifecta and we'd be off to the races.  I sure hope it doesn't happen, but the infallable have failed or have been bailed out. Now the average joe on the street is whining about market losses and it's front page news.  Little Suzie's college fund has lost 30%+ and now we don't know if little Suzie can go to school.  I certainly hope this wasn't their ONLY plan to send Suzie to school.  Probably some financial planner put this together and didn't explain risk.

I was going back to the beginning days of this blog where the VIX was below 10.  It seems like risk was a laughable memory in those days.  This was also the case during the internet boom.  Same story, different sector.  We talk about having short memories (and I'm among those with the shortest), but come on folks.  This is typical.  This is why markets return higher rates over time, because you're taking on risk.  Loss of principle can and does occur.  Booms and busts run in cycles. We're busting, deal with it.

What I also fail to hear is how much principle people truly lost.  Many folks mark to market their gains as if it was locked in.  So over the last several years, someone may have invested 100K, which grew to maybe 150K and now it got knocked back to 125K.  If you ask them, they will tell you that they LOST $25,000.  Got news for you, that's a gain.  If someone can tell me how that's a loss, I'd love to report to the IRS as such.