Weekend Linkfest

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Risk returns.

That's the briefest way to describe what was a painful week in the markets for many around the world. Amid the global equity rout, U.S. stocks had their worst weekly fall in four years. Tuesday's plunge wiped out all of 2007's gains and was followed by the deadest of dead cat bounces. Friday's late selloff here was attributed to traders wanting to go home flat for the weekend. By the numbers, the Dow industrials slid 4.22% while the S&P 500 gave up 4.41%. The biggest losers of the bunch, the Nasdaq and the Russell 2000, regurgitated 5.85% and 6.2%, respectively.

It wasn't just equities, either. Also suffering were (in order of the pain they endured) gold, REITs, commodity futures, corporate junk bonds, emerging-market bonds, and the dollar. The asset class winners: Treasuries, investment-grade bonds and crude oil.

The many factors that have propelled markets higher since the summer are showing decreasing efficacy. Like a magic spell that grows weaker with each incantation, chatter about liquidity, Fed rate cuts, how contained the housing debacle is, and of course, the guaranteed soft landing is having less resonance each time it's repeated.

It's a quiet week for data. There aren't a whole lot of earnings reports, and there are even fewer economic reports. But the monthly nonfarm payrolls report is scheduled for Friday, and it may take on disproportionate importance -- subsequent revisions notwithstanding -- depending upon what else happens during the week.

To help you make sense of it all, we have gathered up some very instructive articles and commentary. By the time you get through this week's Linkfest, you will not only know what happened and why, but you'll be in a much better position to deal with what comes next. That's why I am here ... this is what I do.

So pour yourself a cup of joe, limber up your clickin' hand, and get busy:

INVESTING & TRADING

• First up: This free global interactive map from the The Wall Street Journal shows exactly how markets around the world fared all week.

• The Wall Street Journal reported that Market's Fall May Augur a Waning Appetite for Risk. Talk about soft-pedaling a headline! (free)

• The first casualty of war is the truth. The same can be said for market corrections. Ever since global markets cracked, we heard all sorts of bad dope. Here are the Top 10 Myths of Tuesday's Correction.

• Here's Faber on liquidity, the Yen, and Gold. Meanwhile, Doug Kass was all in/leveraged short Monday. Barron's cover story goes the other way: "Still Betting on the Bull."

• "When financial markets fall, conventional wisdom says the little guy feels the pain while the rich emerge largely unscathed." This time may be different. (free WSJ)

• "Financial stocks make up one of the more important sectors in the broader market, and investors look to those names at times to gauge the overall health of equities. Right now, the sector has pulled back along with the rest of the market, and some analysts say it's reaching critical levels -- where further weakness could spell trouble for stocks." (The Wall Street Journal's MarketBeat blog)

• Which leads us to: "Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley, which earned a record $24.5 billion in 2006, suddenly have become so speculative that their own traders are valuing the three biggest securities firms as barely more creditworthy than junk bonds." Goldman, Merrill Almost 'Junk,' Their Own Traders Say. (Bloomberg)

• Indian Market Broke Before China: Indian Markets have been softening since early February, giving up over 1,000 points from their February peak. They finally broke trend days before the debacle hit in China.

• The usually chipper Jim Jubak asks Which market will blow up next? (MSN). Meanwhile, MarketWatch's Mark Hulbert reminds us that "One day's sell-off does not a bear market make."

• The infamous December Low Indicator is now in play.

• It's not China, it's the Economy (Stupid!) Be sure to scroll down to the list of WSJ headlines from Tuesday morning.

• Almost overlooked in this week's mayhem: Warren Buffett's annual letter to shareholders.

• I drop the F-bomb on live CNBC Tuesday, and no one even notices.

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SENTIMENT/PSYCHOLOGY

• What was the Correction's Impact on Sentiment? (Barron's) If you don't have a Barron's subscription, go here.

• Dan Gross' blog notes what poor timing magazines can have. The March 12 (current) issue of Forbes plugs a story on its cover like this: "Has the Bull Market Just Started?"

• During Tuesday's trading, market internals were simply horrific. Just how bad? According to Jason Goepfert at Sentiment Trader, the New York Stock Exchange's advance/decline was 451/2,949, while the up/down volume was an astonishing 24,752,200/2,844,344,000. That's more than 100 shares traded down to each one up. The Nasdaq A/D was 281/2832, while the up/down volume was 126,657,900/2,885,607,400. From a sentiment perspective, this typically doesn't bode well for the future. (The Wall Street Journal's MarketBeat blog)

• The Fear and Greed Index by James Montier of Dresdner Kleinwort in London got this one right.

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