Drying up liquidity?

Wall Street seems to be bouncing back and forth between Chicken Little and a “don’t worry be happy attitude” With the main question being; is the mortgage squeeze turning into a credit freeze? As I have repeated before this market seems to be entering a new phase of more normal volatility and greater momentum after almost a decade of low volatility and low momentum. It is quite normal to retrench after a break out and the magnitude of the retrenchment often signals the power of the coming rally. Yes I am still bullish and yes I think the current volatility is more normal than extraordinary.