Greece. China. Commodity prices, including oil. Currency wars. There are plenty of things to worry about and markets have sold off. It looks like being a jittery summer.
As the Greek tragedy twists and turns daily, any comment will be out of date by the time it is read. But a few observations can be made.
It is clear that Greek debt can never be repaid in full, so some form of forgiveness must take place – but creditors wish to do so without opening Pandora’s box of encouraging other indebted European countries from following suit.
Performance of indices over Q2 2015
Source: FE Analytics
Some compromise has been reached along the existing lines of ‘more cash for reforms’, ‘reform, grow, and we’ll extend and pretend’.
But it must be coming clearer that you can have a dysfunctional economy incapable of collecting taxes if you have your own currency, gently depreciating in perpetuity. You struggle to maintain that in a common currency – unless stronger partners are prepared to acknowledge they have benefited from the common currency sufficiently to provide fiscal transfers in perpetuity.
So it is possible that no agreement is ultimately reached or the deal doesn't get through parliament and we do indeed see Grexit.
Implications? A big hit to European taxpayers, standing behind the institutions, funds, mechanisms and bodies which Brussels has used to take Greek debt off the banks. The need for further debt issuance by these institutions and, indeed, maybe the European Central Bank itself to make good the losses?
Whilst a Greek exit from the euro would have a negative impact on sentiment towards the entire European project, it does appear that we have moved on from the very real contagion risks of 2011. 
QE, the improvement in economic fundamentals in peripheral countries and the unwinding of cross-border exposures mean Greece could exit the euro without setting off an unstoppable domino effect. But it would hardly be an uneventful process.
The euro would be different, but a weak euro is not unhelpful to activity across the region. In the long run, a more flexible euro might even be seen as more sustainable.
What of the collapsing bubble in Chinese shares?
For some time I have supported the policy shift underway in China, where the government of Li Keqiang has acknowledged that the days of 8 to 10 per cent per annum infrastructure-fuelled growth are over. Using a combination of anti-corruption and anti-smog, pro-green initiatives, the government has sought to tackle vested interests in heavy and dirty industries.
It has embarked on a programme of financial deregulation and reform designed to promote a significant financial services industry, turning China into the Asian finance hub with the development of major renminbi-denominated trade, debt and credit markets. Chinese banks have been urged to expand their non-Chinese Asian lending.
So far, so good. But when this policy appears to extend also to the encouragement of an equity market speculative bubble – and then panicking in response to its bursting – then here one has to part company.
In the short term China is still a sufficiently closed and controlled economy that the fallout from the financial storm can probably be contained. But it risks undermining longer term credibility in the Chinese policy of financial deregulation and growth. And anything which provides a negative impact on growth in China and Asia at this juncture is unwelcome.
And here is the real worry about events in Greece and China.
In a recent speech, the Bank of England’s chief economist, Andy Haldane addressed why interest rates globally were so ‘stuck’ at unprecedentedly low levels.
He makes the point to which I have often referred in recent years: that after major shocks – be they natural disasters or financial crises – people are psychologically scarred (and scared) for years thereafter.
Sentiment, be it of consumers, businesses or investors, is skewed to the downside, always perceiving the glass not only as half full, but likely to break under the slightest pressure.
Unexpected positive developments, such as the benefits of lower oil prices, are ‘banked’ rather than spent, regarded as a windfall not as sustainable. Good news is ignored in the anticipation of more bad news.
The global economy remains highly sensitive to shocks and bad news from Greece or China risks having an amplified effect on activity. In turn, this creates asymmetric risks for central bank policymakers. Starting to raise interest rates, even by a small amount, could produce an exaggerated negative reaction.
So once more, whilst the data from the US – notably on jobs – suggests that the Federal Reserve would be able to start nudging interest rates upwards from this autumn, events elsewhere may well stay their hand. Rates are staying low until the psychological scars have healed some more.
So a tricky summer, with lots of scope for investor panic and market setbacks. I’ll be using these to buy. When was the last time someone worried you about Ebola?
Richard Buxton is head of equities at Old Mutual Global Investors and manager of the Old Mutual UK Alpha fund. The views expressed above are his own and should not be taken as investment advice.
