What Next

First of all, here's a story from the FT about Mexico punking the hedge funds. They bought their puts for $1.5 billion in July. Look at the current commitment of traders.
Their puts are now worth $12.5 billion, effectively hedging all of Mexico's 2009 production at $85/barrel.

And Paulson is telling China to let the RMB appreciate. However, the RMB is now dropping for the first time in three years.

Does this signal a trade war with China?

Will the U.S. counter by devaluing the dollar?

How?

Where's the next bubble? Gold?

One thing's for sure: Chinese equity markets have more pain ahead.