Daily reports of downgrades and rumors of defaults in Europe all bring to mind the frightening fall of the global financial system that began three years ago with the collapse of Lehman Bros. on 15 September 2008. It feels like a “slasher” movie sequel — with an intensely scary set-up, an early victim or two, all ending in a bloody mess. This is a film we have seen before and don’t want to see again.

The stock and bond market edginess of the past two months is linked to four interconnected macroeconomic threats. Together, these four plot-lines create waves of fear that wash through the investment markets.

1.    G7 growth has stalled. The United States, United Kingdom and the euro zone are not likely to grow in the first half of 2012. And a shallow contraction is now a very real possibility.

2.    Sovereign debt downgrades and volatility affect the health of the global banking system, especially in Europe. To paraphrase chaos theory: “The flutter