What keeps me awake at night

1. Something goes seriously wrong in China.  Without Chinese growth, there would be virtually no world growth.  The countries in Europe which are doing well (Sweden, Germany, Switzerland, Czech Rep) are doing it on the back of exports to China, and surrounding the success stories is a fringe of over-indebted potential defaulters.   I'm not saying it's likely, but it's what I'm keeping a close watch on.  After all, Czarist Russia was the fastest growing economy in the world in the decade up to 1914.  It didn't get back to that level of output again until the mid-1950s.
2. Fringe Europe defaults messily.  An organised default (labelled a "restructuring") would be OK.  But if Greece walks away from its debts, and then Ireland, and the Portugal, things would be grim, because after that we'd be wondering about Spain and Italy.  Of course, the crisis would force the pollies to act.  But while they dithered, share markets would decline.  This is a reasonably high risk.  And what really worries me about this is that an already sluggish Europe would be pushed back into recession, taking the rest of the world with it.  My judgement:  a Greek default/"restructuring" is a certainty sooner rather than later.  The others should struggle on.  But I worry that I'm wrong.
3. The US has its own excessive debt/too low savings rate problems.  Plus ... the US might inadvertently default on its debt.  This is the world's largest, deepest and most liquid bond market; the dollar is the world's reserve currency;, the US has (still) the world's largest economy.  I don't think the Tea Partiers will push the US into default, but if they do, all bets are off.  Default would paralyse the banking system and crush loans.  A second GFC.  That's just what we need right now.  If that happens, I'll be selling everything and going into cash.

Bull markets climb a "wall of worry".  However ....