National home prices never go down. Eurozone countries don’t default. Saudi Arabia won’t let the price of oil crash. China’s demand for raw materials is infinite. These are some of the most cherished assumptions of investors and policy makers in the past decade, assumptions that have underpinned trillions of dollars of investment and debt. The U.S. housing bust and eurozone debt crisis demonstrated the havoc that comes when such assumptions are proven wrong. Something similar may be happening now. A pronounced slowing in China’s industrial sector and a steep drop in oil prices have taken investors, business and policy makers by surprise. That doesn’t mean a crisis or recession are in the cards. But it could mean the U.S. economy and markets will take a bigger hit than the relative importance of either China or oil can explain. Exports to China constitute less than 1% of U.S. annual gross […]