Two points:

For those who believe the impact will be limited to bonds (pick the duration of your choice), I would point out that margin as well as the shadow banking structure has reached unprecedented numbers. Once debt begins to crumble, the effects on stock prices will be amplified and, because of the prevalence of ETF's far broader than just the companies having immediate issues. This self-fulfilling prophecy of "eating the young" can become an uncontrollable vortex.

To those who feel that the finite exposure of, say Google, to a downturn is quantifiable as an expected risk value, I would remind you that the stock market can quickly move to "uncertainty mode" and the results are psychologically more qualitative.

It will also likely spread globally for a number of reasons (probably best discussed on the METAR board.

Jeff