Chinese Markets Opened For a Little Bit, And Then Died

Circuit breakers kicked in after the Shanghai got decimated, losing 7.3% in a few minutes of frantic trade. Government officials shut the whole kit and kaboodle down, then threw pies in each other’s faces.

“The yuan’s depreciation has exceeded investors’ expectations,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co. “Investors are getting spooked by the declines, which will spur capital outflows.”

Under the mechanism which became effective Monday, a move of 5 percent in the CSI 300 triggers a 15-minute halt for stocks, options and index futures, while a move of 7 percent close the market for the rest of the day. The CSI 300 of companies listed in Shanghai and Shenzhen fell as much as 7.2 percent before trading was suspended.

Related: Hong Kong is down over 600, or 3%, the NIKKEI is off by 1.2% and S&P futures are off by 21. Crude is off by 2%. The reasons behind the sell off dwarf in comparison to the animal spirits that have seized control of the emotions of investors. Sellers will continue to sell until exhausted. At which point, the market will bottom and we’ll be throwing balls of cocaine at one another again.