BEWARE the Ides of August. For a month associated (in Europe, especially) with holidays and long weekends, August has seen an awful lot of financial crises. Europe's exchange-rate mechanism disintegrated in August 1993; Russia devalued the rouble and defaulted on its debt in August 1998; the credit crunch first made the headlines in August 2007; and stockmarkets wobbled again in August 2011, when America lost its AAA credit rating and the euro crisis raged. Some of this is coincidence. But there is a plausible reason why August might see sharp price movements. Europeans head for the beach to escape clammy city centres. Even Americans, normally obsessed with showing their faces at the office, risk taking the odd day off. Traders and active investors like hedge-fund managers will be tempted to close their most risky positions and take their profits. Junior dealers will be in charge of banks" market-making desks, under strict instructions not to take any big gambles while the boss is away. It adds up to a market with very little liquidity, and thus one that is unable to absorb a lot of selling if bad news breaks. What are the chances of an August meltdown this year? There is nothing inevitable about it. Some would argue that the markets already had a wobble in late May and June, as investors adjusted to the idea that the Federal Reserve would start to "taper" its asset purchases. With a Fed survey finding that 93% of investors expect tapering by the end of the year, that risk is now priced into the market. Worries about a slowdown in China are also commonplace. A Bank of America Merrill Lynch (BAML) survey of fund managers found that those expecting slower Chinese growth outnumbered those predicting an upturn by 65 percentage points. As recently as December optimists outnumbered pessimists by a similar margin. But investors do seem complacent about the global growth outlook. The BAML survey found that a net 52% of fund managers expected faster growth over the next 12 months. This is at odds with the general direction of economists" forecasts, which are being revised down. On the back of this optimism, investors have above-average risk appetites. A net 52% have an overweight position in equities. One source of an August wobble, therefore, might be belated concern about the prospects for global growth. In the year to the end of March nominal GDP growth in America, the world's largest economy, was just 3.3%. According to Lacy Hunt of Hoisington Investment Management, an advisory firm, that is the slowest pace of any annual expansion since 1948. Core inflation, as measured by the personal-consumption expenditures index, is at a 50-year low. Sluggish growth and falling inflation are normally good news for government-bond markets, but they recently suffered a big sell-off. The BAML survey found that a net 55% of investors were underweight bonds. So it is not hard to imagine a sudden rotation out of equities and back into bonds in the face of poor economic news. Another risk relates to Europe. The economic data have improved a bit: the latest euro-zone purchasing managers" index signalled growth for the first time since January 2012. But the euro zone's politicians have still not come up with a lasting solution to the region's problems; its banks are still weak. Everyone is waiting for September's election in Germany, after which the region's leaders may have more leeway to undertake reforms. But there is plenty of scope for nasty surprises in the meantime. The Spanish prime minister is dogged by scandal. The Portuguese and Italian coalition governments look fragile. Silvio Berlusconi, a controversial former Italian prime minister, may face a ban from politics if a tax-fraud conviction is upheld on July 30th, an event that could spark turmoil. The underlying problem for investors is that immense efforts by central banks have stabilised the financial situation, heading off the risk of a euro-zone break-up and preventing a 1930s-style slump in GDP. But they have not yet delivered the robust economic expansion that normally follows recession, nor have they put much of a dent in the debt burdens that set off the crisis in 2007-08. Indeed, financial markets might not be able to withstand a return to normal. As Ben Inker of GMO, a fund-management group, puts it: "Today's valuations only make sense in light of low expected [short-term] rates. Remove that expectation and pretty much every asset across the board is vulnerable to a fall in price. A sobering thought to take on holiday.