The global markets are all excited about Sub Prime mortgages, this is mostly a bank event and shouldn't concern main street. It may offer a great opportunity for value investors :)
An interesting way of looking at the US financial condition is to look at the whole countries balance sheet. Ken Fisher does this and produced one in his book 3 questions that matter. I am reproducing his work here.
Now most people can't relate to numbers measured in billions, so I have reproduced the balance sheet for the average American citizen, by dividing by 300 million. The numbers may appear larger than your used to as there is an income skew, thus making the average different from median. All the same check out the "average" american's balance sheet here: 
As you can see things aren't really "End of the world" headline making. There are some bad issues with American mortagages and some serious issues with people taking out loans that are 5-8 times greater than their combined incomes, but by and large America doesn't have many major problems economically or structurally.
Newspapers and Journalists need to fill their pages and time slots with action grabbing headlines, this means 98% of financial reporting is less than news worthy. Occasionaly someone creates real insite or something interesting happens. The most interesting thing about the most recent volatility is the Fed move. It will be interesting to see what happens in the next few weeks. My bet is on continued volatility (reverting back to 10 year mean), but not much net directional change (+/- 10%) after the dust settles. This activity will be choppy and horrendous for hedge funds that were short vol or used barrier options as insurance, as they will get whipsawed. These same hedge funds will face the indignity of customer redemptions etc. This is all good news for traditional value investors, who may view this as a buying opportunity. I am still bearish U.S. dollars vs. the Euro but it is a structural bet on lower U.S. rates and shift in the EURO being seen as a more serious reserve currency. It will be interesting to see how the ECB handles the next few weeks as it is a real choppiness test of political and fiscal nerves. The source file for the U.S. and per capita spreadsheets are hereDownload us_balance_sheet.xls
. and are a creative commons "attribution licence"
