Most traders will tell you that August was the most volatile period in their markets since September 2001. Equity markets finished the month around 8% down from their highs in late July. At one point in mid-August equities were down 12% before recovering slightly later in the month. Credit spreads crashed wider on almost all benchmark indices as a global flight to high-quality assets took hold.
In particular, mortgage-backed (and especially US subprime-backed) assets, from bonds to commercial pap