Back in early July, I wrote a diary called Neutron Bomb over Wall Street in which I speculated that the ongoing old-fashioned "slow motion bust" was destroying Wall Street finance but leaving the Main Street economy largely intact. Shortly afterward, a few mainstream economists such as Prof. Brad de Long of Berkeley picked up on the same point.

After the bloodbath on Monday, a bloodbath that seems to be spreading almost by the hour to other banks and financial houses, it is worthwhile to revisit that idea: just how much of the financial system disaster is spreading into mainstream Main Street America?