The cost of borrowing funds for the largest American banks is going to skyrocket in the coming years -- and that's just the beginning of their troubles.

A confluence of factors are coming to a head: First, the credit ratings of large Wall Street banks like Goldman Sachs (GS), Morgan Stanley (MS), J.P. Morgan Chase (JPM) and Citigroup (C) are all under siege due to aspects of the financial reform bill, which was passed by the Senate last week. Second, that bill will restrict their lucrative derivatives and trading businesses, which is sure to put a crimp on their earnings. Finally, the vast amounts of government-backed cheap capital that these banks raised in the financial markets in 2009, will all have to be refinanced in 2012 at interest rates that could be as much as five times higher than those they got last year.

"Turkey slipped on Greece and broke China." Remember that old saying?

Well, nowadays, "Europe slipped on Greece and broke the global economic recovery" is more like it.

For more than a year, skeptics have watched the U.S. stock markets soar on bits of economic good news sprinkled here and there, so-called green shoots, all the while wondering when reality would set in.