Mr. Brenner,
Markets have been anticipating commodities unwinds from the Chinese situation for several weeks, so prices have already declined. There may be more selling ahead, but the bulk of it is probably out of the way. Unfortunately, this will operate as a margin call in China and beyond, and margin calls often cause selling in other than the market of the initial margin call as traders indiscriminately sell other assets to raise cash. That is the danger of this developing situation. The danger is particularly acute when the same collateral is pledged multiple times. Such rehypothecation is disturbingly routine in many markets, including bond markets, and was one of the reasons the Lehmann Brothers situation unraveled so quickly in 2008, and why it had a global impact. Given that global debt is higher now than it was then, you can see the potential for disaster.