Yes, and too many people also don't realize that the credit/bond markets are a leading indicator for the equity markets. The trouble has been increasing for 18 months -- remember the SIVs and early rumblings about MBS bonds in the summer of 2007?
Buying equities on dips these days is pure speculation, IMO. How do you value a company when traditional balance sheet valuation metrics do not capture the risk of CDS and other mispriced financial assets that can blow up seemingly strong institutions books on very short notice?
Dead on. And thank you for the reminder/lesson that the bond markets lead equity markets. It seems I constantly need reminding that the serious money is in the bond markets.
Great post.