August 10 Markets' Freefall More Eurocentric Than American

All the attention on Spanish and Italian debt ended up pressuring the second largest owner of these bonds – large banks. Bank of America (BAC) continued to bleed, as did every other money center bank and most brokerages. Most French banks got hammered, especially Societe Generale, which lost 15% on the day, as fears of credit rating drop in that country are taking hold.

On a positive note, since the U.S. downgrade Treasuries have rallied, and this week’s auctions went off without a hitch. We are far better off today than we were in 2008. There is far more liquidity in the system than three years ago. I know this is scant comfort, but I feel confident that we will NOT see a repeat of the credit crisis.