I wouldn't buy equity or debt at this point. There are companies with massive equity holdings who have bought credit default swaps to hedge against various losses. The CDS market is worth around 800 trillion at this point. Most of these contracts will work out without causing problems.
That being said, the last plunge came a day after the settlement of Fannie & Freddie for roughly 90 cents on the dollar. We do not know how much of a factor this was because we do not know whether the parties selling stock were cashing out to cover CDS liabilities. We do know that the contracts covering debt held by Lehman Bros are due to be settled later this month for about 10 cents on the dollar. Someone somewhere is going to eat major losses. It will be a good sign if we get to November without another plunge.
When this debt gets settled though, someone somewhere will have to sell assets to cover their debts. Assuming everyone is properly and responsibly hedged we shouldn't have major issues. But... uh.... 800 trillion is a pretty big number, and the incentive for CDS providers was clearly to gamble: take short-term payments in exchange for bearing risk and hoping you never have to pay up.
Frankly, if I had any US assets at this point I'd convert them into Australian holdings. The exchange rate phenomenal at this point and the shift will insulate against the coming crash of the US dollar. Things are worse than people imagine.