I'll be honest with you. I never dreamed, in my spookiest nightmares, that the financial markets would seize up the way they have recently.

I cut my teeth as an investor during the disastrous bear market of 1973-74, when inflation was running in double digits and the President of the United States resigned under threat of impeachment.

Yet the rout we saw in just the first half of October of this year surpassed even the carnage of those long-ago days.

Recall: In late September, the stock market was already scraping its low for the year. Never, in the past century, has a market so close to its lows plummeted another 26% (as measured by the Standard & Poor's 500 index) in just two weeks.

Many overseas bourses sustained even greater damage. At the October nadir, Russia had skidded 72% in dollar terms from its all-time high, set just five months before. European stocks nosedived 46% from their 2007 summit, even before factoring in the recent decline in the euro currency. Japan, never in the pink of health, lost more than half its peak 2007 value.

In effect, the markets have issued a wakeup call, loud as a jet engine, not only to America but also to the whole world. Too many people have borrowed more than they can pay back.

Now that the easy money has dried up, we're finding out who loses a seat at the party — through bankruptcy, foreclosure and fire sales of distressed assets.

Peering Into the Future

That's what we've endured, but the real questions are…