Most financial commentary is beside the point. The financial turmoil is not, in any way, related to the Federal Reserve and what the Fed may or may not do in the future. All of that discussion is a complete waste of time. The truth is that the financial markets have gone about as far as they can go in the face of almost absurd economic policy in the US, in Europe and in China.
In the US, the war on free markets continues unabated by a hostile Obama Administration. The damage done to the US economy by this administration and by Sarbanes-Oxley and Dodd-Frank is enormous. The vitality of the technology sector and the energy sector masked this damage for a long time, but now those two sectors are stumbling. The significance of the decline in oil prices is that energy was one of the few sectors that had survived the Obama bludgeoning and now, with oil prices collapsing, the energy sector can no longer prop up an economy strangling from an overbearing government.
Europe has been brain dead for years and its economy, pulled along by the US, is no longer capable of economic growth. The ridiculous bailout of Greece is not only disastrous for Greece, but is a game changer for Germany, now saddled with the present and future debts of Greece, Spain, Italy, and France. Even the might German economy can't push its way past these obstacles. By implicitly underwriting four economies who have no intention or hope of curbing their profligacy, Germany has now joined them in a sea of debt with no way out.
Meanwhile China, in some ways the healthiest of all of the world's larger economies, is going through the usual bumps and bruises associated with rapid economic growth. Recall the US in the nineteenth century, when the panic of this and the panic of that were ubiquitous during the most rapid economic progress in the country's history. The Chinese have yet to learn that market forces can overwhelm even the best intentioned government policy. Leaving well enough alone was the best policy for China, instead of trying to control the direction of the stock market. But, China will learn.
The truth is that American and European companies are worth less in a regime of over-regulation than in a regime of free markets. It's a surprise that it has taken so long for the stock markets to face this reality. Even if markets do not crash, the future for stocks over the next decade or so is not great. Stocks will have to await the return of free market policies to regain their forward momentum.