If this doesn't qualify as an epic stock market panic selloff, I'd truly hate to see the real thing. This ranks almost right up there with the Crash of '87. The VIX hit a high of 59 this morning as the S&P hit a low of 970, almost 30% down from its high last October.
Now, as the dust settles and the bottoming action takes place, we have the following winds at our back: coordinated, massive and unprecedented central bank intervention, a significant decline in swap spreads (reflecting a big drop in systemic risk), a rebound in pending home sales (HT to David Gordon), a significant downward repricing of US housing prices (25-30% is my guess in most major markets), significant writeoffs of subprime losses, recapitalizations of global banks coupled with a significant consolidation of banks.
It means simply that an awful lot of positive things have happened recently. The real estate mess that got everything started is in the advanced stages of fixing itself. The vast majority of the losses have been realized. The economy is shifting resources away from the overbuilt housing sector and into new areas. Governments got us into the mess, but they are figuring out how to help us get out (let's worry about the ugly consequences of that later).
There will still be plenty of people prepared to jump out of windows, and pundits calling for an extended and deep global recession, but I'm willing to bet that things won't be nearly as bad as the pessimists are predicting.