Stock Market "Glitch" Or Central Bank Blackmail?

[catdd]

"The White House gets its way again. They get their way on two measures that would have given the people at least a little control of the “too big too fail” banking system. But how they got it, well that might just be the REAL story of the day."



I'm of a mind that it was a warning of what they could do if we passed the audit.

More
http://willyloman.wordpress.com/2010/05/07/was-yesterdays-glitch-really-big-banking-blackmail/

[PeacePlan]

"The White House gets its way again. They get their way on two measures that would have given the people at least a little control of the “too big too fail” banking system. But how they got it, well that might just be the REAL story of the day."



I'm of a mind that it was a warning of what they could do if we passed the audit.

More
http://willyloman.wordpress.com/2010/05/07/was-yesterdays-glitch-really-big-banking-blackmail/ (http://willyloman.wordpress.com/2010/05/07/was-yesterdays-glitch-really-big-banking-blackmail/)


My guess on what happened is the stock market got some trades entered by hackers. They won't want to tell us that the system got hacked because it would make people lose all confidence in the system and cause a huge downturn/crash if they did say so. They have not explained what happened yet and until they do its my guess they were hacked..

[catdd]

It's too much of a coincidence in my mind that it happened the same day as the vote - and just after Bernanke had issued a warning concerning transparency. And it's also too much of a coincidence that no one seems to know who or what caused it.

[ChaosControl]

It was a distraction...

[PeacePlan]

It's too much of a coincidence in my mind that it happened the same day as the vote. And it's also too much of a coincidence that no one seems to know who or what caused it.

The system sure seems to have been hacked by someone for some reason and you may be correct? If it was legit screw up they could trace what happened IMO

[catdd]

Well, it sure "distracted" Bernie enough.

[Vessol]

This was my thought exactly.

Bunch of mobsters running the Fed.

[purplechoe]

http://therearenosunglasses.files.wordpress.com/2008/11/smoking-man.gif

http://mises.org/images4/Bernanke.jpg

http://www.topgunfp.com/wp-content/uploads/2009/12/time-bernanke-man-of-the-year-cover.jpg

[catdd]

This was my thought exactly.

Bunch of mobsters running the Fed.

Let me issue, and control a nations finances, and I care not which puppet sits on the throne – Mayor Amchel Rothchild (1743 – 1812);

Truer words have never been spoken. They could collapse our economy in the blink of an eye - bada bing bada boom.
Talk about owned...

[Pizzo]

I posted the following in response to another thread in the economics sub-forum. I hope it sheds a little light on some things:

It wasn't caused by a fat finger, nor was it caused by an enormous amount of sellers. Basically in a nutshell here is what happened. The market was already getting its ass handed to it. The stocks getting it the worst were energy limited partnerships, preferred stocks, European banks, and closed ended equity and debt funds. There came a point where they made sharp moves down which would normally be good places to start a position, which myself and co-workers did. But they weren't acting right. I proceeded to get out with relatively small losses, and then i cancelled all of my orders, 191 of them. That's really the key. Not too long afterwards, the market began making new lows, sell stops were triggered, more sellers followed along with panic. The NYSE put temporary pauses of 30-90 seconds on most stocks, but the electronic exchanges allowed the stocks to trade through. That is really the largest key. The NYSE has lots of what we call "stale bids" What these are are large block bids at levels where funds want to get long. they will put GTC (good til cancelled) orders out at a certain level. For stocks like GE these can be million share bids. The NYSE is where the large stale orders are for the most part. But if the NYSE pauses, like it did, and large sell orders are coming through, there arent any bids to support the sells. So basically you had lots of sellers looking to sell on any exchange, but not enough buyers on the electronic exchanges to support them. It doesn't mean there weren't buyers at all, just not where the trades were going off. Now to the poster saying they HAVE to eat the trade, that is not true. Trades get busted all the time. Not only can you lose a big winner, like i did yesterday, your big winner can become a big loser becasue you will now be illegally short where you took profits on your long(buy). What that means is a trader, or anyone really, can wind up being short a stock they had no intention of shorting, they were just taking profits on a buy. To put it into numbers using the 60% threshold for busting trades they are doing look at it like this: Trader buys 2000 shared of a stock that traded from $10 to $2 in under a minute. Trader sells his 2000 shares at $8 for a profit of $12,000. Stock trades higher back to $10. Trade gets busted, trader is now short 2000 shares @ $8 with no profits from his long trade. And likely will cover at around $10 for a 4k loss. I love my job.

[Bern]

Thanks Pizzo. Nice post.

[catdd]

Thanks Pizzo. Nice post.

Fugetaboutit

[Pizzo]

Fugetaboutit

HaHa! Ayyyy Oooooo

[The Patriot]

Even if there was a "glitch", the market was down 250 points prior to the 1000 point drop and finished 3000 after the so called "correction". So make no mistake, the market has hit it's peak, e are going for a double dip. It will go up and down up until November, and I believe in the first quarter of next year, we will see a drop comparable or worse than the September 2008 drop. The stimulus money propping up the economy will run out, and then soon after the 2nd wave of adjustable mortgages will reset upwards, and couple this with continually low interest rates(and loss of AAA credit rating) and I think we are heading for 1970s style stagflation, and a depression worse than the one in the 1930s. Oil will collapse in price, corresponding to the drop of the DOW, but will rise back up precipitously as the Fed will most likely kick it into hyperinflation and run the presses, leading to soaring oil prices.

[Pizzo]

Even if there was a "glitch", the market was down 250 points prior to the 1000 point drop and finished 3000 after the so called "correction". So make no mistake, the market has hit it's peak, e are going for a double dip. It will go up and down up until November, and I believe in the first quarter of next year, we will see a drop comparable or worse than the September 2008 drop. The stimulus money propping up the economy will run out, and then soon after the 2nd wave of adjustable mortgages will reset upwards, and couple this with continually low interest rates(and loss of AAA credit rating) and I think we are heading for 1970s style stagflation, and a depression worse than the one in the 1930s.

The Europe situation is a bad one. A run on the European banks would not shock me. Who knows. But everything out there is a huge shitstorm.

[The Patriot]

The Europe situation is a bad one. A run on the European banks would not shock me. Who knows. But everything out there is a huge shitstorm.

I can't give names, but I know people who know people who work for large hedge funds in New York. One of my good friends has a cousin who works for a major hedge fund, a very successful one(in 2008, they got 35% on top of their average yearly returns), and they are forecasting a double dip. He wouldn't say much more, but I am sure this guy knows more than the joe average trader like myself, so I am inclined to agree with him and invest accordingly. I would stay in Gold, leveraged ETFs, and stocks like Altria, Wal Mart, and McDonald's. I would definitely stay out of the european markets(though now would be the time to make a trip to europe with a weak euro) right now. I was just thinking, if our stock market is so priced into greece sovereign debt, I can only imagine the shit storm that would occur on Wall Street if Great Britain entered into a similar debt crisis(which is very possible). We would see precipitous drops in the DOW as our market is so intertwined with London's exchange.
http://www.telegraph.co.uk/finance/economics/6693162/Morgan-Stanley-fears-UK-sovereign-debt-crisis-in-2010.html

[Pizzo]

I can't give names, but I know people who know people who work for large hedge funds in New York. One of my good friends has a cousin who works for a major hedge fund, a very successful one(in 2008, they got 35% on top of their average yearly returns), and they are forecasting a double dip. He wouldn't say much more, but I am sure this guy knows more than the joe average trader like myself, so I am inclined to agree with him and invest accordingly. I would stay in Gold, leveraged ETFs, and stocks like Altria, Wal Mart, and McDonald's. I would definitely stay out of the european markets(though now would be the time to make a trip to europe with a weak euro) right now. I was just thinking, if our stock market is so priced into greece sovereign debt, I can only imagine the shit storm that would occur on Wall Street if Great Britain entered into a similar debt crisis(which is very possible). We would see precipitous drops in the DOW as our market is so intertwined with London's exchange.
http://www.telegraph.co.uk/finance/economics/6693162/Morgan-Stanley-fears-UK-sovereign-debt-crisis-in-2010.html


I don't think the market is so sensitive to Greece alone. The problem is basically a domino effect. If Greece gets bailed out, then that sets a precedent, which means when it's the rest of the PIIGS,(Portugal, Italy, Ireland, Greece, Spain) they will have to be bailed out as well. So Greece may be small potatoes relatively speaking, but it's the first domino. So will the EU monetize all of these countries debt? Will there be defaults? I agree with your friend about a double dip. But what do I know, to tell the truth. I just don't see a way around it. BTW, Britain and France have also been mentioned as far as their economic troubles go. But I guess they have to wait their turn. I've been trading since Oct. of '01 and traded through the after effects of 9/11, london and Spain bombings, the market leading up to Iraq, the mortgage mess and what happened afterwards, and for some reason this time feels a little different. I think the difference is last time people knew what to expect for the most part, even the recent market meltdown of 07-09. But if multiple countries start failing, this can/will be beyond brutal. For the first time I'm a little nervous. But I can just be getting old.

[The Patriot]

I don't think the market is so sensitive to Greece alone. The problem is basically a domino effect. If Greece gets bailed out, then that sets a precedent, which means when it's the rest of the PIIGS,(Portugal, Italy, Ireland, Greece, Spain) they will have to be bailed out as well. So Greece may be small potatoes relatively speaking, but it's the first domino. So will the EU monetize all of these countries debt? Will there be defaults? I agree with your friend about a double dip. But what do I know, to tell the truth. I just don't see a way around it. BTW, Britain and France have also been mentioned as far as their economic troubles go. But I guess they have to wait their turn. I've been trading since Oct. of '01 and traded through the after effects of 9/11, london and Spain bombings, the market leading up to Iraq, the mortgage mess and what happened afterwards, and for some reason this time feels a little different. I think the difference is last time people knew what to expect for the most part, even the recent market meltdown of 07-09. But if multiple countries start failing, this can/will be beyond brutal. For the first time I'm a little nervous. But I can just be getting old.

I can't say whether every single European country will monetize or default. It really depends. I would wager we get some of both. Either way, it will effect those countries negatively. If you monetize, you get inflation, or you default, and you get a collapse of the stock market(of whatever nation you happen to be in). I personally think America will monetize before they default.

[rockandrollsouls]

I have nothing to support this, but I fully believe the massive amount of trading volume required to push the market so low so quickly was due, in part, to high speed electronic trading by major firms.

[Pizzo]

I can't say whether every single European country will monetize or default. It really depends. I would wager we get some of both. Either way, it will effect those countries negatively. If you monetize, you get inflation, or you default, and you get a collapse of the stock market(of whatever nation you happen to be in). I personally think America will monetize before they default.


I agree there will be some of both. And I agree that the U.S. will monetize before default. And just like you said, either way they choose to go, it will effect their country, and others negatively. Scary times indeed.

[The Patriot]

I agree there will be some of both. And I agree that the U.S. will monetize before default. And just like you said, either way they choose to go, it will effect their country, and others negatively. Scary times indeed.

That said, I am not a doom and gloom survivalist type. I don't think their will be a societal collapse, but I think their will be a drastic decline in the standard of living and if America stays on it's current course it will become a third rate Banana Republic.

[Pizzo]

I have nothing to support this, but I fully believe the massive amount of trading volume required to push the market so low so quickly was due, in part, to high speed electronic trading by major firms.

Truthfully, as much as the volume was, it wasn't enough to put the stocks as low as they went IF the NYSE didn't pause trading. Thats where the stale larger bids would have been. Also, the NYSE specialists can show spreads on the bid/ask to attract buyers, knowing that traders have what are called filters that scan the markets for certain parameters. Now I'm by no means saying thats why we fell so hard only because the NYSE paused, but that is the reason stocks like Accenture went to a penny from 40.