Blinking from the ruins.
So, last weekend, you were probably looking forward to a nice, easy start to 2016. A settling in period. Maybe you’d pick up a few bargains after last month’s Santa Claus swoon, maybe even put a few basis points between yourself and another losing year. Fresh starts, clean slates, all that crap. Ramp up for bigger and better things to come.
Chinese stocks plunged on Thursday, by more than 7 percent, forcing officials for the second time this week to halt trading for the day — in this case, after just 29 minutes.
The aftershocks carried over to Europe and the United States, where markets fell sharply once again.
China’s securities regulator announced a suspension of a new “circuit breaker” mechanism designed to help stabilize the stock market, saying the system didn’t work out as expected and instead exacerbated stock losses.
China allowed the biggest fall in the yuan in five months on Thursday, pressuring regional currencies and sending global stock markets tumbling as investors feared it would trigger competitive devaluations.
When the International Monetary Fund added the Chinese yuan to its elite basket of global reserve currencies in late November, officials at China’s central bank patted themselves on the back….
Steps they could have taken to increase the ease with which the rest of the world dealt in yuan were put on hold. Instead, the authorities have embarked on a perilous path of trying to gradually weaken the currency to help make China’s exports relatively cheaper in foreign markets, these people say.
“Everyone thinks this will be a very troubled year,” said Willy Lin, managing director of Hong Kong-based Milo’s Knitwear Ltd., which exports skirts, suits and other apparel to Europe and the U.S. from its factory in Dongguan, a city in southern Guangdong province. “No numbers point to a rosy picture. It will be pretty turbulent.”
Chinese Stock Plunge Forces a Trading Halt, and Global Markets Shudder [NYT]
Global Stocks Slide on China Volatility [WSJ]
China Securities Regulator to Suspend New ‘Circuit Breaker’ Mechanism [WSJ]
China Suspends Stock Circuit Breaker Days After Introduction [Bloomberg]
China lets yuan slide, starts fight to halt turbulence [Reuters]
Why China Shifted Its Strategy for the Yuan, and How It Backfired [WSJ]
The Perils of China’s Market Plunge [WSJ]
Why China Is Rattling the World [NYT]
Gloom Hangs Over China’s Economy Amid Market Turmoil [WSJ]