There’s blood on the streets today as the Australian stockmarket extended its run to 12 straight losses and posted its biggest percentage drop for the year.

The victims are everywhere after the All Ords plummeted 300 points, or more than 5%, in morning trade, lifting the total fall from the 1 November peak to 23%.

Kevin Rudd really is fighting yesterday’s problem when he talks about inflation and boosting the budget surplus. We’ll need to follow the Yanks and cut official interest rates if this wipe-out keeps up.

Rudd will be struggling to post any sort of surplus in 2008-09, especially if the Reserve Bank’s woefully inadequate foreign reserves need to be topped up because of the worsening credit crisis. And state governments will only move further into deficit when the contagion spreads to the housing bubble – as it will inevitably do.

Remember all those bogus Howard Government claims about having paid off Labor’s debt. The Rudd Government is scheduled to borrow $300 million in five-year bonds today.

Australia has almost $600 billion in foreign debt and once again it is the corporates housing the biggest whack of this which are suffering the most.

The MFS stable would have been slaughtered but for a continuing trading halt as they field bids for the Stella hotels business.

Allco Finance Group hit a low of $2.38 before recovering to be 20c weaker at $2.90 by midday.

However, the Allco hybrids referred to in yesterday’s Crikey plunged $11.60 to $41.20, suggesting the founders are technically insolvent on their shareholdings which lie beneath more than $10 billion in group debt.

Centro Retail Trust dived 22% or 6.5c to a record low of 24c and the parent Centro Properties lost 8.6%.

Macquarie Bank has been dragged into the maelstrom as Macquarie Media – arguably its most over-geared satellite fund – plunged 19% or 71c to a record low of $3.09.

Macquarie Bank itself tumbled 8.5% or $5.56 to $60.15 after hitting a low of $59.79. It has small equity exposures to the likes of MFS and Centro, plus is facing rapidly disappearing paper profits on its various investments in the satellite funds.

Take the over-geared Macquarie Communications Infrastructure Group as an example. Macquarie Bank stumped up $104 million supporting a placement at $6.10 last April. The stock tumbled 8% to just $4.42 today despite this soothing statement about its debt position last Friday, so the bank’s paper loss on that investment alone is now $29 million. It’s the cascading effect of this crisis that you’ve really got to watch.

Babcock & Brown faces a similar conundrum as it plunged 11.5%, or $2.13, to a two-year low of $16.30.

Today might also go down as the day the resources bubble burst. I own every resources stock capitalised at more than $200 million and the smaller ones are getting slaughtered.

Ever heard of AIM Resources, Bannerman Resources, Carnegie Corporation, CBD Energy, Energy World, Cougar Energy, IMX Resources or Mirabela Nickel. They are all down by more than 15%.

Be careful folks – it’s very dangerous out there.

I’ve bought another 12 stocks today and am now up over 600 companies. Check out the foolish 113 purchases so far this year here on the Mayne Report.