HEXUS.sharewatch: Dell biggest loser as Europe concerns continue

Understandably, nothing spooks investors more than debt being written-off. The world's financial system is based on everyone owing each other money, paying interest, and eventually paying them back. When that system starts to crumble so do a lot other economic certainties and investor panic ensues.

The global financial crisis was brought about not, as many leftist politicians and commentators are trying to retrospectively claim, by the greed of the banks, but by incompetent financial regulators.

Yes the banks are, by definition, greedy. But when you make interest rates so low that even very poor people can borrow, and at the same time create a regulatory environment that encourages lending to them, and also the repackaging of that debt such that nobody knows where the risk is hidden, you're asking for trouble.

Markets have already priced-in the massive debt write-offs banks had to make from individuals and businesses, but now they're faced with countries doing the same. Greece is the poster-boy for sovereign debt spiral. Put simply, it has gone past the stage where is can even afford to service its national debt, let alone pay it off. The only solution to this is part-default, but the Euro-zone (of which it's part) won't let this happen.

So markets are now concerned that those members of the Euro-zone that are in financial trouble, which lack even the option of devaluing their currency to reduce debt and increase competitiveness, will drag the rest of them - especially France and Germany - down with them. This is why we're seeing the first major correction of the bull market that started over a year ago.

The table below shows a fall of around 4-5 percent was par for the course last week. Dell, however saw a much more dramatic fall of nearly 12 percent. The difference was probably due to the revelation of smaller margins in what was otherwise quite a positive earnings report. Investors were clearly hoping for more.