LEGENDARY investment guru Warren Buffett once noted that it is only when the tide goes out that one discovers who has been swimming naked.
His observation would have applied to the pandemonium that has hit the world's stock markets, after the United States central bank flagged its intention to scale back on the huge pool of liquidity it had been pouring into the global financial system since September.
As the hot money gushes out of the bond and equities markets, it exposes some very ugly fissures that had laid hidden by the sea of cheap money provided by the world's central banks.
Take the Tokyo stock market, which had fallen an eye-popping 21 per cent in the past four weeks after gaining 50 per cent since the start of the year. Its gains had been predicated by optimism over Japanese Prime Minister Shinzo Abe's so-called three arrows - monetary easing, fiscal spending and economic reforms.
However, Japan's ability to spend is constrained by its sky-high public debt, while the lack of bite in Mr Abe's reform programme underlined Japan's resistance to change.
As such, the only arrow that mattered was the Bank of Japan's ambitious programme to print up to 7.5 trillion yen (S$98.1 billion) in fresh money every month - a move that would rival in size the US Federal Reserve's own US$85 billion (S$108.8 billion) monthly money-printing efforts.
Now, that threatens to turn awry as the US monetary policy heads in the opposite direction.
But the biggest threat of all is the People's Bank of China's purported move to flush out the excesses in the mainland's shadow banking system by keeping its hands folded, as cash-strapped commercial lenders struggled with an unprecedented cash crunch last week.
Its hardline stance led to troubling questions as to whether it was merely a ploy by the Chinese central bank to punish troublesome small lenders for using short-term interbank funding for longer-term investments - or a sign of even more serious failings which have yet to be unveiled in the Chinese financial system.
Whatever the reason, coming as it did in the wake of the Fed's preparation to "taper" off its money-printing programme, the impact on the rest of the world was devastating.
Stock markets in commodities exporters such as Brazil, South Africa and Australia, which sell to China, were pummelled, as the Shanghai stock market plunged almost 10 per cent in a week.