- The author believes the market is fundamentally driven by global leverage that is now unwinding, unlike what the "talking heads" claim about it being a subprime problem. - Various sources of leverage over the past 5 years, like repo markets, carry trades, and CDOs/CLOs, have begun unwinding and blowing up funds, dealers' balance sheets, and markets. - As this deleveraging continues through events like the ABS CP market stress and potential unwinding of the $1 trillion yen carry trade, the author does not believe the Fed can contain it through rate cuts due to the risk of further destabilizing the system.