"U.S. stocks plunge to worst 1-day drop since 2001"

All the headlines are about stocks, but the real story is the increase in cost to insure bonds. Remember, U. S. Government bonds require no insurance. I just saw an article in Bloomberg that said that bonds in Mongolia only yielded 1.39% more than Treasuries. As the risk of default goes up, the cost of insurance will make risky bonds worth much less.

This could easily become a monumental vicious deflationary circle. The very instruments that have expanded credit on a global scale will contract it even more quickly by making risky debt very, very, very expensive to own or issue.