Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of mortgage insurer MGIC Investment (NYSE: MTG) are fresh out of pixie dust today, crashing as much as 27.7% (so far) on heavy volume.

So what: The stock plunged more than 20% last week as head-to-head rival PMI Group (NYSE: PMI) said it might have to stop signing new policies. Today, MGIC threw gasoline on the fire by reporting another month of delinquency claims rising faster than cures.

Now what: MGIC has a somewhat more stable balance sheet than PMI Group, but nowhere near the cash reserves of third musketeer Radian Group (NYSE: RDN). If the dominoes start to fall, MGIC would go out of business in short order, and with only one solvent mortgage insurer on the market, the already-stalled real estate market would go into a deep freeze. Please don't tell me you're shocked to see homebuilders such as Pulte (NYSE: PHM) and KB Home (NYSE: KBH) falling almost as steeply as the mortgage insurance providers under these circumstances. These stocks might still bounce, but right now they all look like they're heading for the edge of a cliff called zero.

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