Although recent price action suggests otherwise, a slow-burning geopolitical situation in the South China Sea may yet become a flashpoint for market volatility.
The U.S. is talking tough in the face of mounting evidence of Chinese land grabs and military movements near its neighbors, and Beijing is defiant. The threat of a confrontation between the world's two largest economies hasn't registered on traders' radars, that may change, some say.
"Market mentality has a tendency toward complacency, and right now, geopolitical risk is nowhere on the radar screen. That could be a major mistake," Chicago-based trader Jim Iuorio warned.
"The developments in China seem to be moving in one direction, and although they may not seem to be a problem now, that could change quickly," he added.
The topic also found its way into the somewhat rambling remarks last week of former Lehman Brothers CEO Dick Fuld.
The disgraced executive, whose firm's collapse hastened the 2008 financial crisis, folded the conflict into a laundry list of geopolitical worries for stocks. These included Russia's military encroachments, and the threat of a nuclear Iran.