Well, my crystal ball has been cloudy recently, and there are too many moving parts to put an exact "when" anything will occur. Back in '07/early '08 I was ridiculed for saying things were going to He!! in a hand basket, and soon, and lo and behold, in October of '08 we were two days from an implosion of the banking/financial system.
IMO, they should have let it fail and cleared the debts, but they instead threw on the order of $21 Trillion at the "problem", socialized the losses, and allowed the banks to double down on their bets with the sure knowledge that the taxpayer and the Fed will be there to bail them out. By doing so they have made the next downturn literally orders of magnitude worse than it otherwise would be.
When will the next downturn take place, and can the keep the balls in the air until November? I don't know. I do know that every day when I wake up I expect to see a cataclysm in the markets, and am amazed that they have managed to kick the can so far.
There are quite a few triggers out there. Europe is a major one. China is another. They are in a major contraction right now and who knows how that will turn out since their major export market, the Eurozone, is essentially moribund. Then there is the next debt ceiling kabuki show, due in late September or early October just prior to the election, which could result in further downgrades of our debt. You can also add in the recent JPM "trading" loss. That's where I'm placing my money (bet that is). The loss has been reported as $2 Billion initially. Now it's between $4 and 7 Billion, with some estimates that it could be closer to $31 Billion, because of the suspension of their stock buy back program. In the latest round of stress tests, the Fed ruled that if certain loss limits were exceeded that the banks would have to suspend any stock purchases until they had resolved the losses by increasing their reserves. There are rumors that JPM has done this precisely because the loss is so large.
Keep in mind that JPM has THE largest derivative book in the US, on the order of $70 Trillion with a book of 2.8 Trillion. That means that a very small loss can result in insolvency. If that happens, well, let's just say that the fat will be in the fire due to chained counterparty risk. Think 2008 on steroids.
