Reality has set in and panic will run for a while. But remember that every asset is being tarred with the same brush. As one wise owl just put it, the fire sale is occurring because fund managers have to raise money in order to finance clients' redemptions.
One asset class this is undergoing the fire sale is commodities. And this, along with various Asian markets, will rebound sharply once value has been created. It is tough to put a time frame on panicky emotions, back to Prof. Kindleberger's marvelous anatomy of a crash.
China has not stopped growing because of sub-prime, CDO, SIV or ABCP strudels in Texas and Frankfurt, Germany. Nor have her Olympics been canceled. Nor has her 17th Party Congress. Nor has growth in India been stopped because of America's Countrywide Financial Corpse. The Economic Time™ in Korea will not worsen because of US and European financial convulsions, either!
This implies that the commodity sell-off is more about fire sales than about growth concerns. All of which implies that this asset class will do particularly well in the rebound.