Peter Schiff, the CEO of Euro Pacific Capital, isn't one of those guests Nesto and I have to badger for opinions. Ask him a question and the long-time bear will tell you exactly what he thinks with vigor, even when he has an aching throat. Schiff thinks the U.S. is headed not just for a recession but rather a full-blown depression. On the upside, he believes the coming economic situation will look familiar.

"The Depression [in the wake of the financial crisis] was temporarily interrupted by a bunch of stimulus which ultimately weakened the economy further," says Schiff. He adds the government's likely knee-jerk response of stimulating is, "probably going to be the fatal dose, the lethal dose" prior to "a complete economic collapse."

Which is precisely why Schiff wasn't among those expecting a debt deal relief rally last Monday morning. The attention paid to the deal was a "massive victory for propaganda that would have done Goebbels proud" (yes, this Goebbels). Schiff believes the

The markets have been and are selling off hard. But you already know that. If you want a rundown of what caused this carnage, you can click back to our prior videos and columns. This piece is here to tell you what's happening now and help you deal with it.

Let's break down the internals, then handle the bigger picture. To that end, Matt Nesto ran some numbers:

* The VIX (^VIX) has climbed 30% over the past month. That sounds impressive but it only brings the index to somewhere in the low 20s. This is nothing compared to the 50 and beyond that accompanied the stock routs from the Internet bubble or financial crisis. Options traders were betting on this outcome in size, per Jon Najarian's conversation with me last week. (I spoke earlier with Jon. He says, in short, that the traders making the bet on a spike in vol got aggressive with it this morning and are taking off the trade now. Which is grossly simplified already but, to make it even more so, the options guys in the pit aren't betting on even more market panic setting in... at least for the moment.)

* The Automakers, Banks & Diversified Financials are getting kicked in the face with a steel-toed boot. On average the groups are down 25% from recent highs and about 15% in the last month, most of it coming in the past 8 days.

* Money is coming into Transports and Software, at least relative to the above sectors. Nesto notes the transports work well in a weak crude oil environment. Will they hold up to what seems to be a market bet on a crushing economic slowdown? Hey, I said they were relatively strong, not ripping higher.

* The market drop is creating seemingly attractive yields, especially compared to the 10-year Treasuries' 2.5%. As I write, AT&T (T) is yielding 5.9%, Intel (INTC) 4% and Pfizer (PFE) gets you 4.2%. It's not my bag, but if you're one of those dividend fans, these things are probably tempting. Again, they aren't so much something I'd do with my money, but your style may vary.

Which brings us to my style in general. I'm not talking about my rambling inability to stop speaking in metaphors, nor my  shaved head. I'm talking what to do in a sell-off. This isn't my first rodeo, folks. I lived through the Internet, LTCM and housing bubbles, and I'm still standing. I learned most of the below the hard way, and I'm giving this advice to you for free: