There's something deeply anomalous about a stock market crash at the peak of United States corporate profitability. Nothing like this ever has happened before.
Standard and Poor's downgrade of American sovereign debt from the highest, triple-A rating may be the silliest pretext for a stock market crash in world history. America is the only big industrial country in the world that will have more taxpayers rather than fewer when a newly-issued 30-year bond matures.
... why is the market selling an S&P earnings yield of 8% to buy 10-year Treasuries at 2.5%?
... the link between US GDP and corporate earnings is the weakest in history, and 46% of S&P sales are outside the US.
... we have never had stock market crash when stocks earned nearly three times the Treasury bond yield on a current basis.
The bubble that has popped here is not American government debt, but the overstretched and overpromised hedge fund industry. It's not the end of the world. It's just the end of the hedge fund industry.