The market collapse is (of course) centered on the Coronavirus and its effect on the economy. For investors, this economic concern translates to lower corporate earnings projection.

Above and beyond the earnings picture is a collapse of the debt balloon. With global borrowings in excess of $250 trillion, a global pandemic could easily “pop” the debt balloon with a series of defaults caused by businesses and countries with insufficient cash flow to service their debt. The lack of cash flow can be attributed to a slowdown caused by the Coronavirus pandemic.

To make matters worse, the Saudis and the Russians openly abandoned production quotas, forcing the price of oil to drag to near $30 per barrel. This is probably an effort to bankrupt the fracking industry. (Frackers cannot produce and make money when oil is below $50 per barrel.)

Already the “spread” on low quality paper has widened and bids for corporate debt issues have disappeared.

While all eyes are on stocks, the real worry is about the lower quality debt stream all around the world. It really is all about the debt.