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You could probably give a gosh darn about Metrocall (MCLLC:OTC SC - news - boards), the wireless data and messaging company that reneged on its debt this morning. The stock's been a complete dog. It traded at $14 a year ago but has been pretty much downhill ever since. It probably didn't even register when the stock was halted. You needed a microscope to find it anyway.

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But not if you're in the debt market. In the debt market you see Metrocall radically differently. You think, Oh boy, there goes $600 million -- which is how much Metrocall has in outstanding bonds. This default is a jarring one to every bondholder and every equipment maker that lends to folks like Metrocall. Believe me, at one time, this Metrocall was an active business. I owned its debt at one time. I thought it seemed like a good way to pick up some yield without a lot of risk.

Wrong!

Stuff like the Metrocall default is something you'll have to get used to. The process will go like this: Metrocall will default. Those who lent to Metrocall now get hosed, whether it be a telco vendor or a mutual fund. That takes money out of the system. It's deflationary. And it curtails optimism.

It doesn't matter to Metrocall if the Fed eases or not. It's too late. Anyway, lower rates won't allow Metrocall to grow out of its jam.

Metrocall is why I would be careful with junk bond funds right here. They probably own some of this gunk and they now have to write it down. It's why I'm still negative on the telecom equipment makers. They are probably owed, too, and they have to write it down.

And it's why I like nontech more than tech. Scholastic (SCHL:Nasdaq - news - boards) doesn't have a lot of truck with Metrocall. Never had, never will.