They say about bankruptcy, that companies tend to fail slowly, and then suddenly. An eerily similar course of events seemed to play out in 2008, as a domino effect paralyzed the global economy.

I am no alarmist, and in fact believe there is plenty of opportunity to make money in this environment. Yet the global economy feels fragile, ready for the next flashpoint to put us all in a tizzy.  Lackluster economic growth provides little impetus to survive any leak in the levy.

It is alarming that banking reforms over the last few years have been superficial at best. As former Bank of England Governor Mervyn King points out in his new book, The End of Alchemy, “the 2008 crisis wasn’t an anomaly but the natural consequence of bad incentives that are still baked into money and banking—and likely to create another crisis.”[i] King points out that little has changed in a global banking system predicated on central banks alternating between the peddle and the brakes. “Too big to fail” promotes an environment where bankers participate in the upside of markets, but do not face the consequences of their demise.

The current case in point is an emerging debt bubble in China. China’s debt has swelled to 260% of GNP over the last decade[ii]. Loans approaching default have doubled in the last year. For context, a mere 2% decline in the Yuan last year caused a tumble in global markets. If China’s bubble bursts, so will global markets.

In a myriad of other economic trouble spots, South America appears ripe for significant unrest. Venezuela has been crushed by low oil prices and Socialist policies. Grocery shelves are empty as its population can’t buy basics like toilet paper. In Brazil, the Solicitor General has moved to impeach the leftist President there.  South America’s largest economy is on the brink of a meltdown. [iii] Even closer to home, Puerto Rico has experienced a 10 year recession. It appears that Puerto Rico will not make an $800 Million general obligation payment due July 1. [iv] US residents are leaving in droves.

In the UK, there is a dead heat in a referendum to separate from the European Union, at a time when refugees from Arab nations have crippled the political process. Without support from the EU, Greece would be insolvent.

So things don’t seem too bad here in the US of A. But beware, the world is teetering on the brink of another flashpoint. Companies should not stop investing at home or oversees. But we should be prepared in the event of an global economic slowdown.

[i] A Simple Plan to Save the World by Michael Lewis Bloomberg Businessweek

[ii] The Coming Debt Bust-The Economist May 7, 2016

[iii] Brazil Leader’s Fate Heads to Senate Vote

[iv] Puerto Rico Governor Warns of Another Default by Nick Timiraous-The Wall Street Journal