Why the coming nervous week is not so reassuring:...

• Non-performing loans of banks are high or under-estimated in China, India, and Europe.
• Bank profitability will be consequentially affected.
• Losses and provision requirements would make holes in bank capital.
• Banks have to be further  capitalized as per regulatory norms.
• To facilitate stronger balance sheets, capital induction has to ensue.
• New investors will hold off in crashing equity markets and if Governments have to support as in the case of India, Government funding will hit Government's fiscal position; neutralizing moves towards fiscal  balancing.
• Bank businesses will improve but quite slowly even as banks struggle to redraft (clean up) balance sheets. Business growth, consequentially, will be halting, gradual and slow. There will be significant impacting on business and there will be differential impacting with many small businesses affected. Uncertainties will accelerate the market turmoil.
• The Chinese and Indian economic expansion represent how there is a debt overhang.   The strong asset price growth seems to wind up to a bubble. There has been apparent overinvestment in sectors like real estate. As growth decelerates, all these further credit excesses will expose banks anew and the business failures will accelerate the economies' downward moves. Leveraging will enhance risks. There will be adverse selection too as banks struggle to regain profitability.  
• Political risks will accentuate in Turkey and the Middle East. Commodity prices affect Gulf Cooperation countries, Australia, South Africa, Indonesia and Russia. Brazil and other Latam countries too look vulnerable.  
• Thus,  there is expectation of volatility global markets, in equities , foreign exchange and commodity prices. There should be widening in risk spreads as bank , corporate and emerging markets  are downgraded by rating agencies.   

 Volatility is the spice of a trader's losses.

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