The once-unthinkable loss of the AAA rating will constitute a further hit to already fragile business and consumer confidence.

The theory is that if you take interest rates negative, people are going to say, "That's a silly game! I'm not going to lend my money to governments who want me to pay them. I am going to go into the stock market where I can get positive returns!"

[When] the market is trying to get to terms with, first, lower global growth, particularly out of emerging markets and China. And, second, the market is worried the central banks have run out of ammunition. So put these two things together, and then investors are repricing the market lower.

Once you start moving [market] lower, then you trigger of all sorts of things. You trigger people who have to sell because they're over-levered. So they sell their winners and their losers. They're just trying to raise cash. So, what you then get is spreading malaise throughout the global markets.

Investors have to ask themselves two questions. How much can we grow our investments? And, can we afford our mistakes?

Most people are under exposed to global assets, including foreign stocks, bonds and currencies.

As we spend more, and as companies are pushed to invest, they say, "Hey wait a minute! There's more demand in the system. Let's invest more."