On July 18, just past the market’s peak, I wrote here claiming the sub-prime mortgage mess would not trigger a bear market and recession – that there was more bull market ahead. Since then stocks tanked. But I still think I’m right. This is just an archetypal bull market correction. Here is why!

First, back then, and central to my argument was that credit spreads, spreads between high and low quality debt of the same maturity, had widened but just barely – an iota of what happened in the last century’s many credit crunches, including recent ones of 1997, 1998 and 2000-2001.