NOBODY should be surprised by the recent extreme volatility in global stock markets.
While precise timing and extent are virtually impossible to predict, the mounting economic and geo-political trends and risks, have made it inevitable for some time.
Europe has been struggling to avoid a possible triple-dip recession, with deflation, constantly being buffeted by the rolling Greek debt crisis, that is, at best, simply being "patched up" short-term, rather than resolved.
Although the recovery in the US has been welcome, especially in employment, growth has been inconsistent, and is now completely overshadowed by concern about how the intentions of the US Federal Reserve to begin to raise interest rates will actually play out.
Chinese growth is clearly slowing much faster than the authorities had led us to believe, probably closer to five per cent than the claimed seven per cent, being compounded by the bursting property and stock market bubbles, and revealing the extreme structural problems stemming from years of over investment, poor economic management, unstable and unsustainable banking and particularly shadow banking, mounting inequality, and so on.
These economic factors have been further compounded by significant geo-political tensions, mostly still "unresolved" - Russia/Ukraine, Iran denuclearization, ISIS/Syria, the Korean Peninsula, Chinese territorial disputes, and so on.
The most difficult days for stock markets will be if some of these economic and geo-political uncertainties coincide.
And, again, overlaying all of this is generally weak political leadership, and governments and policy authorities having to operate in virtually unchartered waters, with little or no relevant historical experience on which to draw.
In Europe, until there is a fundamental restructuring of Greek debt, including significant debt forgiveness, the crisis will roll on.
Surprisingly, the enormous amount of liquidity that has been pumped into the US economy, and globally, especially since the GFC, has only had a modest effect on the real economy, but underwritten bubbles in stock, bond and property markets, and speculative investments in emerging nations, while increasing debt and inequality.
Concern is how all this will be "reversed" as the Fed raises interest rates, potentially causing further "corrections" to bond, stock, property and currency markets.
The Chinese Government and authorities are obviously struggling, as evidenced by a range of almost unprecedented policy responses, including devaluations of the Yuan, cuts in interest rates and other monetary controls, and a series of disturbing, what we might call "command or non-market" measures to shore up the stock market, most of which haven't, and won't, work.
There is no doubt that stock markets are struggling to interpret and digest this potentially quite explosive set of "risks", and to predict how they may unfold. They are living hour-to-hour, day-to-day.
So far, in recent months the Shanghai stock index is down some 60 per cent since its mid-year peak, and our market has been down some 15-20 per cent from its recent peak.
This situation should be of particular concern to our government and authorities, especially given our now very open, and financially dependent, economy.
Yet, all we get is fairly vacuous "assurances" that Chinese growth will "pick up", suggesting that somehow we will "muddle through", while they run all sorts of media diversions, with the PM in Northern Australia, Hockey raising expectations of tax cuts, and another vote on the Republic, diversions over same-sex marriage, and so on.
Be sure, markets and voters will have "their day", able to finally crystallise their assessments of governments and their policies/management.
Market volatility will continue for the foreseeable future, while the Canning by-election may determine the fate of Abbott and his Government.