As of this moment, China's Shanghai Composite is down 42.11% from its June 12th high of 5,178.19; it presently sits at 2,964.97. Even more remarkable is the fact that, since Friday of last week, the Shanghai composite has fallen 19.08%. China's momentous Monday downturn also cut the wealth of its billionaires by over $14 billion (some individuals even entered the dreaded "millionaire" club).

As of last week, over $1 trillion in paper wealth evaporated from global stock markets. If we include Monday's volatile session, in which the Dow opened at a record 1,087 points below its closing price, this figure actually hits $1.8 trillion; for reference, this massive decline represents roughly 1/35th the value of international securities markets. Think about that, 2.86% of global capital investments vanished in a single week. In fact, on Monday alone, the world's richest 400 individuals lost a collective $124 billion. The biggest losers were Facebook's (FB) Mark Zuckerberg, whose net worth fell by $3.9 billion, and Microsoft's (MSFT) Bill Gates, whose wealth declined by over $3.2 billion. While these losses won't harm either tech magnate, they exemplify current market volatility. So... what the heck is going on? In short, slowing global growth, increased uncertainty, and tons of speculation.

China: At the center of current market declines, China's glorious growth bubble has finally burst. Although China's GDP growth prospects remain enviable (ranging from 4-6%), the country's GDP projections are falling faster than was expected. While this reality has many technical implications, at a fundamental level, lackluster economic performance results in massive capital outflows; hence the reason for China's recent stock market selloff.

Equally concerning is China's unwillingness to implement free market reforms. While the government has responded to China's ongoing economic crisis, in the forms of continued currency devaluation, restricted stock selling, ongoing government investments, and yet another interest rate cut, none of these policies has calmed investor speculation. Granted the authoritarian government still has many other monetary tools, each of the aforementioned decisions has proved a temporary solution (excluding lower interest rates). In the absence of serious market reforms, China's oligarchy can only artificially support short-term capital markets. Therefore, without free market reforms, Chinese stock markets will inevitably face an even larger future correction.

Emerging Markets (EM): Another compounding factor is the ongoing weakness in EMs. From an economic standpoint, most EMs supply developed markets with commodities, mainly oil and minerals. Hence, with oil and precious metals prices at multi-year lows, the majority of EMs, like Brazil, Russia, India, Indonesia, and South Africa, face declining growth prospects. Due to lowered GDP forecasts, these countries must also address difficult accompanying factors like higher unemployment, lower interest rates, and inflation. From here the picture may become fairly grim. However, since we haven't yet witnessed widespread EM recessions/depressions, I won't fuel the proverbial fire by speculating.

Greece: That's right, he's back. In case you forgot the endless market turmoil caused by Alex Tsipras months ago, let me remind you that he led Greece's notorious attempt to default on over $230 billion in debt. Now, after having accepted EU and institutional demands, in exchange for debt relief programs, Tsipras has resigned as the Prime Minister of Greece. Needless to say that the country's future is now up in the air, which thereby also jeopardizes individual Eurozone economies: markets hate uncertainty.

America: As for America, the Bureau of Labor and Statistics claims domestic unemployment is a steady 5.6%. Moreover, economists expect an upward Q2 GDP revision (from 2.3%), which is a far cry above America's dismal Q1 GDP growth of 0.6% (which was originally negative). The only other unknown is, you guessed it, Janet Yellen. Not surprisingly, the Federal Reserve continues to delay necessary rate hikes. While investors have long been led to believe in a September rate hike, current global economic conditions have some speculating there may not even be a 2015 rate increase. Regardless of the Fed's ultimate decision, Yellen must give markets increased clarity so that investors can trade in alignment with expectations. In any case, America is best positioned to weather through this international storm.

Oh, and by the way... the Dow just experienced its largest single day reversal since October 2008 (from 16,312.94 to 15,651.24).