I think there is an issue for us as investors with the debt ceiling. But this may be less a fiscal issue and more a manifestation of the fracturing of Washington since Trump’s revelatory performance demonstrating the shockingly large amount of money that can be raised by politicians advocating white racism and political dysfunction. More about the fiscal side tomorrow.

Evergrande’s gigantic borrowing will doubtless be found to have reached far more deeply into bank loan portfolios outside China than markets are now aware. But this the case with any major potential bankruptcy. For the US, this is certainly nothing of the magnitude of the 2008-09 financial crisis, nor even of the savings and loan crisis, where the “Keating five” senators actively worked to stop the government investigation of crooked S&Ls. For China, though, the problem is potentially more serious.

What to do?

Day traders have a field day during a time like this. Most of us, however, have a much longer time horizon. So high on my list is avoiding doing something dumb that will mess up my long-term strategy. This implies that in most cases the best thing to do is nothing.

For me, though, a selloff is a chance to upgrade my portfolio. Typically, the clunkers I have among my holdings (everyone has them, it’s a fact of life), start to outperform–if they never went up, it’s hard for them to go down a lot. They also become more visible psychologically. So I’m on the lookout for stocks I’ve wanted to own but thought too expensive, which are typically sold off the hardest in a downturn, and trade out of clunkers.

I realized long ago that I have no ability to time the market’s ups and downs. So I’m looking for a stock that I already own that’s, say, 5% cheaper than it was a couple of weeks ago and a clunker that I’ve suppressed memory of–and which I should have sold long ago (or never bought) that’s suddenly up by 5%. If I see this situation, no matter where the market is (put another way, I’m ignoring the possibility that the spread between the two might widen), I’ll sell the latter to buy the former.