Where are we vulnerable

The seas appear to be calming, but the quiet reflects the passing of the storm, and rocks lie just beneath the surface.

So, where are we vulnerable. And, what are we vulnerable to.

Given the amount of debt outstanding, we are vulnerable to a rise in interest rates.

Given the fragility of the recovery, we are vulnerable to a rise in oil prices.

Given the trade imbalances in the global economy, we are vulnerable to a trade war.

Given the level of confidence in China, we are vulnerable to an asset collapse there.

Given the fickle nature of financial markets and the risks outstanding, we are vulnerable to a generalized decline in confidence.

Given a host of structural issues (prospective new wave of defaults, unemployment, monetary/fiscal exit) we are vulnerable to a double dip.


As we found out so painfully in 2008. Confidence is fleeting. We know and can see the vulnerabilities in the system. What we don't know is when the positive will turn to negative.