Stock traders tonight are worried about bank liquidity and sovereign debt. These are the kinds of worries that make it hard for stock markets to stay at the elevated levels they have been at this year.
The specific worries at this hour are about banks in Europe, the government budget in Italy, political gridlock in the U.S. Congress, and a hint of a slowdown in transportation activity in China, but it would not be much different if we were worried again instead about a hurricane in the Gulf of Mexico, instability on the Arabian Peninsula, radioactive food in Japan, and a drought in grain-producing regions. The point is, there is a long list of problems and weak points that the world has not had the wherewithal to address, and these runs of bad news will continue for some time to come. It is only if we decide that fingers crossed and chewing gum are not enough to hold everything together that things will start to settle down.
As to the specific worries about the banks, it is a good time to remind everyone that there are plenty of banks in most countries, and that even if all the banks in one region or country were to fail, it does not take much to put together a replacement transaction clearinghouse. There is no risk of running out of banks, no matter what happens to sovereign debt or the other issues financial traders are worried about tonight.