And the odd thing is, with the Saudis pissed off at the Iranians, you'd think oil would drop in value as the tattered remnants of OPEC finally fall apart. But people, tending to panic, have bid up the price of oil by a couple of bucks in the last few days. It makes no sense, other than bad news sells, and you can get people to panic about just about anything.
This is good news, but no one wants to hear it. Problems in China only means even cheaper goods for America, and that means a higher standard of living for us.
It also helps to put the Chinese stock market into perspective. The Chinese are big savers - compared to Americans who are just spenders. Each Chinese person has as much saved as Americans have in debt. And their stock market is largely small-time "retail" investors, which tends to make it more volatile. So big swings in their markets are to be expected.
Will there be some losers in this Chinese downturn? Well sure. Just as $40 oil is bad news to someone working the fracking fields of North Dakota (and to Exxon and Shell), there will also be losers in a downturn in China.
American automakers (and indeed, European and Asian ones) are seeing (and forecasting) slow growth in 2016, as the Chinese market for new cars levels off. About half of GM's sales come from China - but not half its profits. Since the Chinese operations are "joint ventures" with Chinese companies, GM does not make much money per sale. The real risk to GM is that once sales are saturated in China, the Chinese may start exporting assembled cars to the United States, and if they can keep prices startlingly low, it could cut into American-made small car margins.
But again, this may represent good news for the consumer, who now can buy a cheap car for under $10,000, brand-new.
The other problem for some American companies is in exporting. With the American dollar rising (or more precisely, other currencies dropping) people who export goods will have a harder time selling their products. This is bad news for Boeing or GE or Carrier. Selling giant turbines or commercial A/C chillers or jumbo jets to foreign markets will be harder to do, as the cost of these products is now higher. But of course, many of these "exporting" companies have hedged their bets by building components or entire products overseas, which may tend to ameliorate the problem. Other products, such as grain and other food exports, may just have to bear higher prices.
But overall, I am not too worried. People panicked when our economic opponents became too strong. Now they panic when they become too weak. Maybe the real deal is to not panic, as taking action based on fear is sure to end you up in a world of woe.
Just a thought.