This would be getting really concerning, if there was anything to the argument that stock markets are discounting mechanisms.
I say "if" because I still remember encouraging the folks at MarketBeat to continue their exposition of the disconnect between debt and equity in the Fall of 2007. (also)
The stock market didn't discount squat.
By August 14, '07 it was apparent* to anyone who cared to enquire that there were huge problems in the credit markets. The DJIA went on to set its all-time high (14164) on October 9.
From the current denizens of MarketBeat:
How low can Shanghai go?*On the 16th the Financial Times rolled out some whistling-past-the-graveyard humor:
On Wednesday, the Shanghai Composite hit another low, ending down 5.97 points, or 0.29%, to 2037.68, the lowest close since Feb. 2 2009. That record 2007 high looks more and more distant, with Wednesday’s closing level 66.55% lower than the record hit on Oct. 16 2007.
Those gloomy data points out of China just keep on coming and weighing on the index.
Wednesday’s decline was led by banks, due to mounting worries over loan quality. According to Sanford Bernstein, non-performing loans ticked up 1% in the second-half from the previous half of the year, while overdue loans, an indicator of loans possibly turning bad, rose 29%....MORE
First comes the pain; then come the jokesWhile I was politely saying Ben Stein was in error:
10 reasons Titanic was actually a subprime RMBS ...
Ben Stein and the Markets (nutshell: Ben's wrong)
A couple months later I was not so polite:
Ben Stein, My Trading Floor Be-atch