Macro Man is traveling today so is forced to keep his observations brief:
* The Nikkei short suggested on Friday has worked a treat, and a testament to finding outliers when beta is trumping everything
* Alrhough Chinese equities are now down on the year, Macro Man remains unconvinced that CNY/CNH depreciation will become disorderly....at least not til we see a substantial chunk of China's FX reserves ebb away. And if that were to happen, it's reasonable to ask what would happen to the Treasuries etc where those reserves are currently parked.
* Alrhough it feels like Armageddon, it's important to recall that these types of episodes are more normal than not. The current one does not necessitate recession, though it has probably stayed the Fed's hand for September
* VIX will open above 30 today...that has historically been the point of exhaustion for non-crisis corrections. Today's price action will therefore be quite telling, and owners of Kevlar gloves may wish to deploy them, if only gingerly, this morning