By now you've probably heard it a hundred times: "we're in a correction," or "we're not in a correction." "We're down 10% so that's a correction." or "No it's not you have to be down 15%… " and on and on it goes.

These are all meaningless arguments. Numbers are not what a real correction is all about.A real correction in the stock market is about changing the way we do business.

Correcting the excesses of times past. Working through the bad times that are going to hit, and working toward a better more viable economy.

No doubt you've already seen these issues in our current economy.

We are way, way over our heads in debt. Because of the free flow of money, companies that never make a dime of profit, are allowed to exist for years. Corporate balance sheets have seen the most dramatic move ever from equity financing, which is common stock. To corporate debt.

The most popular form of financial engineering for any corporate CEO is to re-purchase his own companies shares. And most often this is done by buying back common stock and replacing it with corporate debt.

How has that worked?

Not well if the corporation doesn't have the cash flow needed to make those monthly bond interest payments. And that is why this market is signaling it needs to be corrected.

That's what this correction is all about. Just like the stock market “correction” of 1929, this market is correcting the excessive leverage in our system right now.

It doesn't take a Big 5 accounting firm to point out that we've been living above our means for a very long time. Borrowing to pay for today, and hoping the bill never comes due.

The market is "correcting" all that excess.

The market just moved up the due date for our debt. And my assessment is that those areas of the economy which are most debt-laden will be the ones which suffer the most. Don't be surprised to see corporate defaults skyrocket.

This is also the reason that the market participants are rushing into the safest possible investments, in an effort to avoid this “correction.” The current all time low interest rate in US Treasuries, in addition to a prediction of Future Fed Interest Rate policy, is also a move to safety. An effort to get away from those companies who have balance sheets that look like a credit card statement from a big spender.

It's time to get all that back under control.

And incidentally, those companies who have operated in a prudent manner should prevail throughout this correction.

So, that's what we really mean by “correction.” It is not a number. It is a dramatic change in the way we have been doing business.

Just like all of the major stock market corrections in history. It is the reining in of the excesses build from too much borrowing…