Photo: Wikimedia Commons
Right now, we have a few key stories pinned to our desktops to remind us of what may be to come soon, and what we need to watch for.From international terrorism, to global currency wars, to bubbles about to burst, hear are the stories we’re watching right now.
What to watch for: Al-Qaeda, under constant siege on the border between Pakistan and Afghanistan, may be looking to other theatres to expand its range and protect its assets. The caucasus south of Russia, like Georgia, Armenia, and Azerbaijan, may offer a location where Al-Qaeda can recruit and train in relative secrecy.
Investments to watch: Oil and gas prices, particularly in European markets; military stocks, like Boeing and Lockheed Martin.
What to watch for: Right now, the housing market in the U.S. is showing signs of a double-dip. With it, many more home-owners might find their investments more underwater than they would like, and may decide to turn in the keys.
If that happens en masse, many more banks might be under threat by a deluge of defaults, turning the housing double dip into another mortgage backed security crisis.
Investments to watch: Homebuilder ETF, regional banks, your fixed income portfolio.
What to watch for: The threat of a terrorist strike has been ratcheted up in recent weeks, with the U.S. State Department calling for increased vigilance by U.S. tourists in Europe.
But this isn't just about ruining vacations. An attack on a top European capital could lead to the end of that country's involvement in Afghanistan, as occurred with Spain and Iraq after the Madrid bombings.
This could increase pressure on the U.S. troops in the country, and the pace of the draw down.
Investments to watch: Oil, gas, military stocks.
What to watch for: We've been watching the crisis in Belgium for sometime, and still the country has yet to come to a consensus on its new coalition government. Without a government, and with a divided country aiming for a split, Belgium may be the surprise first European country to default on a portion of its sovereign debt.
That could have carry on effects for exposed banks and individual investors. In the aftermath, they may need to raise cash in a difficult environment.
Investments to watch: European sovereign debt, European bank shares (Fortis, BNP Paribas, Societe Generale)
What to watch for: Weeks ago, conversation on how an ETF could collapse was hot, but now it has cooled. What concerned us more was just how popular ETFs have become amongst the retail investing class as a means to gain exposure to a particular market or index.
But what if, suddenly, an emerging market dips or investors decide to take gains and move on?
Those speculators playing the market through the ETF may withdrawal, and the index might collapse with it, in a matter of minutes.
Investments to watch: Emerging market ETFs, commodities ETFs, etc.
What to watch for: With the mid-term U.S. election on November 2, markets are beginning to price in a Republican win and a government unable to take action due to its Democratic-Republican split.
But do they really know what they're pricing in?
If the government is hung, in that legislation cannot be passed quickly, the only body able to act to stimulate the economy without restraint is the Fed. That will lead to more QE, the monetization of debt, and a declining value of the dollar, but not new fiscal stimulus and limited job growth as a result.
Investors may be comfortable with that increase in unemployment, but it is bound to lead to more domestic instability in the U.S.
Investments to watch: U.S. retail ETF, U.S. government debt
What to watch for: Everyone continues to talk about the bond and gold bubbles, brought on by a short-term worry of deflation and a long-term worry of inflation, respectively.
But a slide into one scenario, rather than the other, might trigger a selloff in that asset as investors flee for safer ground, or cash.
Investments to watch: Gold, Gold ETF, U.S. government debt
What to watch for: Talk of a bubble in Chinese housing has been significant, but the threat of that bubble bursting is about more than Shanghai home prices and real estate company stocks.
If the China bubble bursts, investors might flee Asian emerging markets all at once, as they become concerned over the legitimacy of their investments. Investors might also seek to cover their Chinese losses by selling their Indian shares, etc.
Investments to watch: BRIC ETFs, China real estate companies, emerging markets funds
What to watch for: Everyone has been worried about the health of Ireland, Greece, and Portugal and whether or not the three will default on their debts. But the real worry might be the PIIGS and France turning on Germany and its advantageous position in the eurozone.
Germany uses low wages to reap an export advantage from the rest of the eurozone, while refusing to give in on the Maastrict Treaty's 3% deficit to GDP rules. This leaves fringe countries, and Italy and France to a lesser extent, unable to compete in export markets or issue fiscal stimulus to put more people back to work.
The result could lead the block, largely losing outside Germany and Northern Europe, to turn against Germany and demand an end to the current austerity push.
Investments to watch: European sovereign debt, European banks, German exporters (like Volkswagen, Mercedes Benz, Siemens)
Status: Very Hot
What to watch for: Countries around the world are in a race to devalue their currencies. The result is no one is winning, and many are moving to more creative and aggressive options, such as Japan's new quantitative easing and Brazil's new foreign investment tax.
The next step could be agressive tariffs on foreign imports. The U.S. Congress is already moving in this direction with China, and the EU is ramping up the pressure on the Eastern powerhouse as well.
If this accelerates, are we heading for a tariff war that ends in the sequel to the Smoot-Hawley tariff act and stops globalization in its tracks?
Investments to watch: USDCNY, EURCNY, companies exposed to the Chinese market.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.