More Matt Levine’s Money Stuff, whom I insist you start reading immediately: .
“It makes sense that China’s economic uncertainty would cause economic uncertainty in the rest of the world. China is big. It makes less sense that volatility in China’s stock market would cause market volatility in the rest of the world, because China’s stock market seems to be unusually retail-focused and driven by technical pressures and gambling rather than economic fundamentals. But it is really weird to see China exporting its retail-oriented, technically-driven, limit-down style of markets to the rest of the world. Here we are, though: “The South African rand plummeted by the most in more than seven years on Monday,” falling as much as 9 percent against the dollar at one point, and the reasons seem not to have been entirely fundamental:
The rand’s slide on Monday probably came after “a combination of stops and margin calls caused mass capitulation” by Japanese retail investors, Gareth Berry, a foreign-exchange strategist at Macquarie Bank Ltd. in Singapore, wrote in a research note.
Chinese stocks were down again today, though “China’s financial system is ‘largely stable and healthy,’ the country’s foreign exchange regulator said at the weekend.”
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