Reply #4: Yeah, derivatives do present some problems, and have done so since their invention,

[swag]

but stock volatility is at only a near-term high, and greater volatility, not so long ago, represented nothing so much as a buying opportunity for stock investors.

The mortgage contagion may spread, but it hasn't happened yet.

http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=m&q=l&c=

Greater calamity may ensue, as Krugman points out below, but DU schadenfreude over wealth destruction is premature.

http://economistsview.typepad.com/economistsview/2007/07/paul-krugman--2.html

As Krugman points out, bad credit, pricey oil, and the exclusion of working Americans from a share of the last few years' growth in wealth are the big threats to our economy now.