THE RADAR: 10 Emerging Stories You Need To Start Watching Right Now

Radar Operator

Right now, the world is focused on the chaos in the Middle East and crisis at Japan’s Fukushima reactor complex.

But what if the the market is ignoring what’s next?

We’ve compiled 10 crises that could be about to rip your playbook to shreds. They range from the financial, to the macroeconomic, to the geopolitical. And they all have potential wide ranging effects.

Will Belgium turn out to be the surprise sovereign debt default?

Status: COLD

What to watch for: Belgium is still without a government, breaking all sorts of records with 288 days now since it last had leadership. The country's ethnic groups are battling it out over a potential split, which would see Wallonia separate from Flanders. Where the debt ends up is uncertain.

Investments to watch: Belgium CDS

Could the commodity bubble's end spell doom for the Australian economy?

Status: COLD

What to watch for: If there's a slow down in Asia as a result of Japan and or China, then Australia could feel the heat. The reason is that Australia is a key commodity exporter for the region, and a long-term decline in demand would hurt both the Aussie dollar, and the broader economy.

The Australian housing market is believed to be in bubble territory already, so if the economy was to slow, it may get slammed.

Investments to watch: Commodity prices, particularly copper, the Aussie dollar, and Australian banks

Could we be witnessing a new revolution in China?

Status: COOL

What to watch for: Spillover from the uprising in Tunisia has been obvious in the Middle East, cascading to Egypt, Libya, Yemen, Bahrain, Syria, and beyond. But what if such a spillover came to China?

China has many of the same underlying worries that exist in those countries: high food and fuel inflation, a repressive regime, etc. And a small protest movement is developing, with protests occurring recently.

Investments to watch: China ETFs

Could China's tightening programme slam the global economy?

Status: COOL

What to watch for: China's aggressive tightening cycle has targeted the Required Reserve Ratio (RRR) at the country's banks. That tightening cycle may already be at an end, because it has worked to slow down the economy and lower inflation.

Gary Shilling believes that a hard landing could occur, and would be a decline in Chinese growth to 6% annualized.

Such a result would hurt the country's banks, which are involved in the country's housing bubble, which may collapse under such circumstances.

Investments to watch: China ETFs

Could the Middle East revolutions escalate to war between Saudi Arabia and Iran?

Status: WARM

What to watch for: While the world's eyes may remain on Libya, the real worry is in the Gulf, where Saudi Arabia has become militarily involved in a conflict in Bahrain. Bahrain has a large Shia population, and may come under the influence of Shia Iran. The two are the great powers in the region, Saudi Arabia backed by the U.S. and Iran independent with a large population.

Investments to watch: GULF ETF, Oil

Could the deflation problem return in the US?

Status: WARM

What to watch for: While the Federal Reserve may think the threat of deflation has subsided, there remains the possibility that it may come back. The key cause of such deflation would be the continued fall in housing prices, driven by a weak market and little demand.

In order for this to continue, employment growth needs to remain limited, and buyers need to remain stuck in homes where values are in decline. If the economy continues to rebound and add jobs, deflation may be beat, however.

Investments to watch: Case-Shiller home prices, Home builders (XHB)

Could the U.S. debt limit fight send yields on Treasuries soaring?

Status: WARM

What to watch for: Morgan Stanley predicted in January that politicians would turn the debt limit into a political issue, with Republicans using it to gain concessions from Democrats. Now that fight is actually happening, with Republicans pushing for reforms to entitlement programs before they'll cave on the debt limit.

The deadline for the limit to be raised before the U.S. hits the ceiling in sometime between April 15 and May 31.

Investments to watch: U.S. Treasuries

Could an ECB rate hike tank the global recovery?

Status: HOT

What to watch for: It is likely that the ECB, under Jean-Claude Trichet, will hike rates at their meeting in early April. There's no sign that that rate hike will actually help contain the region's inflation problem, however, it remains likely it will occur.

The last time the ECB led the tightening cycle, the market tanked in response. The reality is the global economy may not yet be ready for a tightening program, with growth still not strong enough to go employment, particularly in troubled eurozone fringe states.

Investments to watch: European banks, major indices

Will Ireland force the corporate tax issue, and flee the euro?

Status: HOT

What to watch for: Ireland has positioned itself for a fight with Eurozone leadership over its bailout package. Leaders like Sarkozy and Merkel are pushing Ireland to give up its low corporate tax rate in exchange for better terms on its bailout loan. But Ireland doesn't seem willing to budge, and instead says it will force haircuts for bondholders of Irish bank debt, some of which is owned by German banks.

Investments to watch: Fringe European sovereign bonds, European banks

Will Europe's last line of debt defence fail in Portugal?

Status: HOT

What to watch for: Portugal's government has collapsed on a failed austerity budget vote. It now looks like it will be several months before a new government is formed. No new government, no new budget. This means Portugal may need to raise capital sooner, rather than later, and with yields spiking, they may need to turn to the EFSF rather then the market.

The next step would be Spain, but it's far from certain Spain will need similar support.

Investments to watch: Fringe European sovereign bonds, European banks

Worried about what's hitting the economy right now?

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