Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets.

Hello and welcome to the Thursday edition of DC Today. More drama and excitement in the markets today. I'm back in the Newport Beach office

and I want to first make a broader point about something to do with small cap and big cap stocks

and then I'll talk about today's actual market action. There's quite a bit of conversation right now

about whether or not the big outperformance of large

cap to small cap, how small cap stocks are doing worse than larger capitalization companies in

the public stock market is indicative of the credit issues, that there's less amount of credit

flowing through and small cap companies need access

to credit more and therefore they're doing worse than large cap companies. I think it's a fair

summation, but I don't think it's fully accurate. I think if we could index small businesses,

family owned businesses, non-publicly traded,

you know, small cap, meaning real small cap, like mom and pop, family business, what we call

kind of small business in our country. And you were to look at that indexed, which obviously

can't do without price discovery and

public trading of the values.

But if you could, I think that that would look very constrained by essentially what has

happened with credit conditions and financial conditions tightening.

But within the small cap space, publicly-contraded companies, I buy the

argument that there may be some who are more capital dependent, although a lot of large-cap companies

are still very, need great access to the capital markets, whether it's equity or bonds or

what have you.

And so I do wonder if it has more to the growth cyclicality that effectively, what I mean is when economic growth is slowing, you expect revenue to slow.

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