What is worth panicking (or at least being genuinely concerned) over is debt, which is why it makes more sense that the panic was really over the Greek debt crisis spreading in general, and Mohamed El-Erian's speech in particular.
"We've seen a crisis start in a country—Greece—become regional, impact the whole of the Euro zone and is on the verge of truly going global," said El-Erian, CEO of the world's biggest bond fund.
He said the debt is a "transmission mechanism to go from country to region to global. So we should take this very seriously."
S&P 500 banks fell financials fell nearly 5 percent as investors worried about the financial system freezing up again, similar to what happened when Lehman Brothers collapsed in September 2008.
One trader who spoke on condition of anonymity said fixed-income desks in Europe shut down early for the day and that "European banks are halting lending now."
Similarly, the US faces a debt burden that, while not as large a percentage of gross domestic product as Greece, is approaching that level and could spark major problems domestically.
"We are not Greece. We have more time. But what the Greek crisis tells you is debt and deficits matter," El-Erian said. "The structure of your deficits matter and the US doesn't have much flexibility."
"Don't underestimate how quickly this can happen," he added. "There are structural headwinds out there and we better get our act together before those structural headwinds become overwhelming."
Good thing Lloyd Blankfein is doing God's work, right? Strap in folks, it's going to be a bumpy economic summer. Just remember -- someone will make money off your misery. Someone always does, even (perhaps especially) when they don't make anything of actual value.
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