I wish I could disagree with some part of that post. The only aspect he does not cover is the deflationary impact on the equity markets (and probably other asset classes as well), as funds scramble to cover bond losses by selling equities (or maybe I missed that part of the post.)
I haven’t agreed with the whole “bottom up” Bear Scare scenario, but this top down thing is a big concern.
As the author implies, California real estate just took a sudden and grievous blow. The seemingly overnight precipitous shift in the availability for mortgage credit (especially jumbo) can be summed up in one phrase: