OftenWrong

Like when you see flash crashes, that's because the big firms are spooked by 2008, so they've got their algorithms set to hair trigger alert to take their profits and get out fast, when certain warning signs flash.

Bear in mind that nothing was actually changed much in 2008, they bailed it out, but it's not like they control all the black boxes in the world, the black boxes are bigger and blacker than they were in 2008, contagion looms like a sword of damocles, collateral debt obligations could blow up again and even bigger this time around.

There's nothing inherently wrong with a credit default swap, it's actually a brilliant hedge, but when everybody is hedged to everybody else, and some of them start to default, panic spreads like wildfire and it goes around the world in a matter of seconds, and these days its the computers making the calls, and garbage in garbage out means computers panic too.

IMO the rest of the world is already in recession, and in certain markets, like oil, there is a long term structural depression, it's just that the policy stimulus is hiding most of it, and the Americans are burning so hot and bright right now, they are singlehandedly propping the world markets up.