Wall Street turned another flat start into a daily loss on Monday. The S&P 500 (1.29 percent, 14.04 points) and Dow Jones (1.24 percent, 126.82 points) showed the worst performance on the day. The NASDAQ followed further behind, dropping 0.69 percent (15.49 points).

According to CNNMoney.com, Wall Street is set to drop once again during the morning today.

The majority of the downward momentum on investment indexes is still coming from Europe, but the 24-hour cycle is also adding to the downturn. Worries in one time zone lead to lower trading, other times zones then react to that lower trading with lower trading, and the cycle continues throughout the day. Finally, watching the whole world trade lower the previous day the first indexes to open the following day trade lower due to ongoing worries. There does not have to be much of a substantive reason for markets to trade lower, or higher for that matter, for a streak of days, weeks, or months. All that is truly required is for this feedback loop to go uninterrupted.

This negative reinforcement has many analysts worried that the U.S. could quickly return to a bear market environment. It is unlikely that such a market would result in the disastrous drop on Wall Street that saw the Dow Jones Industrial Average bottom out at 6,600 points. However, this downturn could continue indefinitely.

According to Reuters, European traders are still overcome by fear of the debt crisis, and the handling of the crisis. First the financial planners called for huge budget cuts in exchange for a massive bailout. Next they worried that the bailout had been too big. Now they are worried that the budgets cuts were too deep and happened too fast. More than anything this chain of events may go to show that the people who claim “expertise” in financial and investment matters are really just making it up as they go along.

Rounding out the news, Treasury Secretary Timothy Geithner said this morning that his monetary talks in Beijing were successful.

According to Reuters, Secretary Geithner had gone to China to discuss the possibility of adjusting the yuan-dollar peg. Unfortunately, Secretary Geithner’s idea of “success” is a handshake agreement between himself and President Hu Jintao that China will investigate the possibility of reform.

There is perhaps nothing more important to American recovery than 100 percent countervailing of the yuan currency peg against the dollar. It is mathematically impossible for our open market economy to compete against China given the current currency imbalance. In the face of this fact, the best we can do is get tacit consent from Beijing that they will think about the possibility of voluntarily adjusting their currency.

If anything, China adjusts its currency so U.S. diplomats will give them some slack for a few months or years. After spending six years at the table with the Bush administration China allowed the yuan-renminbi to float about 6 percent on international markets before tying it down again. This also coincided with the U.S. supporting China’s bid for the Olympics and flooding China with investment capital. After China got what it wanted it stopped cooperating.

The case today is exactly the same, the only thing that has changed are the players involved.

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