Warren Buffett told CNBC's Becky Quick that the measure will help unfreeze the credit markets, but warned that it is not a "panacea" for the economy. He also revealed that he owns only two domestic stocks personally, Berkshire and Wells.

I received a lot of e-mails from subscribers on Monday after the collapse of Wachovia, asking me which bank I believe will be the next to fail. Most investors are afraid they will wake up next Monday morning with a worthless financial stock, whose deposits have been sold to another institution.

The New York Times has an interactive graphic that visually conveys the impact the current market crisis has had on the financial sector. It has market cap scaled regions for two time periods, September 12, 2008 and October 9, 2007. It would be interesting to have a similar chart by a value metric, such as book value.

Now that's a major market headline. Fear strikes Wall Street as several significant events hit the financial sector.

The SEC has it backwards

The SEC has it backwards

As the opening quote to this post highlights: expected value matters more than simple probability. The probability of something going wrong ....

For years, investors have bemoaned the low dividend yield on stocks. But with the market down roughly 20%, the yield on the S&P 500 Index is up to 2.25%. That doesn’t sound terribly rich, I know, but it is only slightly less than the average money market is paying right now.

Your humble editor is skeptical that this latest financial rally will turn out to be anything of substance… except another shorting opportunity when the time is right.

A look at the stress in the credit default swap market for financial companies, relative to the ratings implied by the debt markets.

The U.S. economy is on the way out, says Dave Gonigam in The Daily Reckoning’s blog, Desidooru Saloon. Dave has picked up on a report from the Financial Times that says an anonymous Gulf sovereign wealth fund has slashed its dollar-based holdings. China’s biggest holder of dollar reserves, the State Administration of Foreign Exchange, is also reducing its dollar exposure…

China needs to diversify out the diving dollar and gain greater control of energy reserves - and Latin America serves both purposes best…

Liveris comments

Now will people look at Dow?

Bottom line: The current rout in financial sector shares might smell awful to the simple onlooker. But smart investors should know that it smells like the beginning of the end of their collapse, too.