Ludwig is right of course. And you are seeing the liquidation of the malinvestment right now. Just as we saw the liquidation of the malinvestment in early 2000 from the internut bubble.
The huge right-downs you are seeing in the financial sector represent liquidation of the debt instruments created during the bubble. This is a largely deflationary health restoring process. The excess housing stock also needs to be worked off. This will take time.
And go back and look at the sifting process in the tech sector earlier in the decade. The investments that were economic survived. Those that weren't are gone along with all the capital invested in them.
All this is inevitable and for the good. But it doesn't mean that we are destined for a depression or even a recession. Keep a sharp eye but don't get caught up in the panic.
I count on Congress and the Pres to do the WRONG thing, and deepen/prolong the pain.