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2010-05-07 Economy

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Posted by Bobby 2010-05-07 05:50|| || Front Page|| [1 views ] Top

#1 WaPo has an interesting review: Stock markets went haywire on Thursday. Shares were already falling over fears of fiscal problems in Europe when something, perhaps a structural flaw in U.S. markets, dragged prices into a historic and breathtaking plunge...more unrest may be in store for Friday as market officials and regulators try to sort through the aftermath.

Rumors about the cause of the chaos were rampant on Wall Street and in Washington. Some traders speculated about human error, such as an electronic trade of stocks entered with the wrong amount. Regulators offered little clarity, saying they would investigate...The NYSE has "circuit breakers" in place to pause the trading of stocks during a panic. But investors can also trade stocks on 10 electronic platforms that have sprung up in the shadows of the NYSE in recent years and generally do not stop unrestrained selling...new SEC rules [launched in 2007] toppled the dominance of NYSE. The trading of its own listed stocks dropped from 85 percent to 21 percent, said James Angel, a professor at Georgetown University's McDonough School of Business.

As a result, a single entity can no longer put a stop to panicked selling. The markets Thursday were a preview of what happens when other trading venues take over, he said.

"We are dangerously unprotected from a real-time meltdown," Angel said.
The country's in the very best of hands.

Posted by Anguper Hupomosing9418 2010-05-07 07:11|| 2010-05-07 07:11|| Front Page Top

#2 My tin foil hat is on. The economy was tanking in '08 but why the crash on 9/15? One month before the election. No one really knows why. Now this. No one really knows why. No one speculating it could have been a cyber attack? Certainly seems possible to me. Get Soros on board, and you could really steamroller an event like this.

Posted by Nimble Spemble 2010-05-07 10:22|| 2010-05-07 10:22|| Front Page Top

#3 A whole bunch of people got blown out of their stops yesterday. A number of names went to zero or one penny. For example, Boston Beer (Sam Adams, SAM) was trading in the high fifties and went to one penny briefly. Take a peek at the one minute chart.

Since the market recovered immediately, most of those people weren't able to get back in in time, and lost a bundle, depending on how tight their stops were set.

There's an old market manipulation that works like this: you (or your group of cronies) sell enough to drive the market into the stops people have set. When the stops are triggered, more selling results, which drives the market further, triggering more stop selling. You and the group buy back at the bottom of the artificial dip. Profit!

It also says that there's little deep liquidity. No size buy orders for Boston beer 30% below market, for example. Apparently no one wants to be in the market in a situation where a buy order like that was triggered?

Posted by KBK 2010-05-07 15:03|| 2010-05-07 15:03|| Front Page Top

#4 This just in:

Gibbs said Obama is waiting to hear the results of a review before ruling out what might have caused it, including the possibility of sabotage.

I wouldnt rule anything in or rule anything out, Gibbs told reporters in his West Wing office Friday. I think thats, appropriately, why theyre reviewing what may or may not have happened.

Gibbs said Obama thinks the the circumstances around this is something that should be watched or should be reviewed and looked at.

These people are geniuses, I tell you, geniuses.

Hey, bozos, how about looking into oil rig sabotage?

Posted by KBK 2010-05-07 17:33|| 2010-05-07 17:33|| Front Page Top

#5 "Gibbs said Obama is waiting to hear the results of a review before ruling out what might have caused it"

And to give Soros time to cover his tracks.

Posted by Barbara Skolaut 2010-05-07 19:02|| 2010-05-07 19:02|| Front Page Top

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