Faith in Government Low...

Steen Jakobsen, Chief Investment Officer at Litmus Capital Partners, says a big risk for markets is the fact that faith in the U.S. government's ability to fight the economic markets, as well as in central banks' monetary policy tools, is eroding.

"The fact of the matter is that people have a huge disbelief in government," he said.  "The real crisis 2.0 is not about the new normal or whatever term is being used, the new crisis is a crisis of faith in the U.S. system. We're far away from that point now but that is a clear risk," Jakobsen said. 

Because people are losing faith in the governments' ability to bring the economy back on track, the impact of various policies is smaller, while keeping interest rates at record lows has altered investors' perception about what this actually means for the market, Jakobsen warned.

Investors no longer perceive low rates as good for stock markets because they create liquidity, but as a sign that a slowdown in economic growth is coming, he said. 

Jakobsen predicts zero or even negative growth for the US economy for the third and fourth quarters.