The Chinese stock markets were suspended after a 7% drop. As of Pacific coast time 7:30 am this morning, the New York Stock Exchange has lost over 300 points.
What’s amazing about this story is that one of the major figures responsible for the stock market in China said that the circuit breakers which are in place to shut the market down if it loses too much, were themselves a problem. Instead he thought the mere presence of the circuit breakers made people panic and stay away. His solution: let the markets ride and stay out of it. Milton Friedman is alive and well in China!
