Butterfly effect the perfect chaos to put markets back into flight

"Does the flap of a butterfly's wings in Brazil set off a tornado in Texas" was the title of Edward Lorenz's talk in 1972 that helped bring aspects of chaos theory to a wider audience.

Yet many investors seem to believe the butterflies’ hyper-activity is temporary and their influence inconsequential. Globally, governments have engaged in extraordinary policy responses to the latest economic downturn. Financial sector support has amounted to some 45% of GDP in advanced economies (although only 2% of GDP in emerging economies) and fiscal stimulus packages of some 4% of global GDP. It would be inconceivable if growth did not expand in the light of this, and, in due course as the impact of this largesse fades, economies will face their day of reckoning for the recklessness...