ALMOST ARMAGEDDON MARKETS WERE 500 TRADES FROM

[katty]

more: http://www.nypost.com/seven/09212008/business/almost_armageddon_130110.htm

ALMOST ARMAGEDDON MARKETS WERE 500 TRADES FROM A MELTDOWN
By MICHAEL GRAY

Posted: 4:16 am
September 21, 2008

The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post.

Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - a 22 percent decline! - while the clang of the opening bell was still echoing around the cavernous exchange floor.

According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning.

The panicked selling was directly linked to the seizing up of the credit markets - including a $52 billion constriction in commercial paper - and the rumors of additional money market funds "breaking the buck," or dropping below $1 net asset value.

The Fed's dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt.

[Name removed]

1. Deleted message

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[On the Road]

3. And This Would Do What

for all of us other than having our bank deposits disappear?

[earthside]

2. I Say: "Prove It."

This is why we need some immediate Congressional hearings before anything is passed.

These Wall Street insiders and Bushites will say anything to scare us.

This time I want to see some faces on television, sworn before a Congressional committee making those kinds of statements and proving it.

[snappyturtle]

7. Thank you earthside! I am sick and tired of the fear factor. Of course, I

don't know about you but two years ago I couldn't help but wonder how the real estate market could keep going as it was....where were the gurus then? This 'meltdown' certainly didn't happen overnite although they would like us to think so. I had to cash in stock and sell my real estate to get my kids through school and help pay medical bills. If little ol' me can act responsibly why can't the big guys? This fear factor sounds like a temper tantrum of a child manipulating a situation.I don't trust them and they're in too big of a hurry for us to fork over the cash. Sounds and smells of scam....they probably already have their next speculative market in sight.

[katty]

9. concur-and we'll never see their faces nor any sworn testimony

[cui bono]

10. My thoughts as well.

I'm just feeling that this is another scare tactic to get us to surrender immediately.

I'm sure there is plenty wrong in the market and with the banks, but let's open up all the books and let people who can sort through it, outsiders, have a look and determine the best action to take after a little reflection.

[HamdenRice]

4. If the money market/commercial paper market collapses YOU WILL BE LAID OFF

The let them fail crowd is incredibly irresponsible. This is some scary shit. If the commercial paper market collapses, there will be very widespread layoffs. The article goes on to explain:

Without commercial paper, "factories would have to shut down, people would lose their jobs and there would be an effect on the real economy," Paul Schott Stevens, of the Investment Company Institute, told the Wall Street Journal.

[earthside]

13. I want to hear Pelosi explain ...

... what you just said. I want to hear Paulson explain it. I want Frank and Dodd to explain it.

If this is that serious, then why are WE only going to get to hear about why AFTER it is presented to Congress and is passed.

I am extremely suspicious of such a drastic, expensive plan when even Bush, yes even Bush, has not gone on TV before the nation in prime time to explain why this bailout has to be passed tomorrow.

Have we learned nothing during the past seven years?

[TomClash]

5. NYPOST

Hmmmmmm.

[satya]

8. As in "Rupert Murdoch"? I'll take this one with a grain of salt. nt

[TomClash]

11. You're right!

But that might be one grain too many.:)

[Festivito]

12. Yeah, they don't go the the NYTimes or WashPost, instead...

they go the NYPost known for making statements about Dem candidates that turn out to be wrong EVERY ELECTION.

[akwapez]

6. The dow will not drop 22% in a day. There are stops in place to prevent that

They would freeze trading

[Renew Deal]

14. It can happen

The New York Stock Exchange has set its criteria for trading halts in the event of a steep
market drop, making only slight changes for the first quarter from the fourth, according to data on the NYSE Web site.

For the first quarter, circuit breakers will kick in if there is a drop of 1,350 points, or 10 percent, in the Dow Jones industrial average.

There will be a one-hour halt in trading if the drop happens before 2 p.m., a 30-minute halt if the decline occurs between 2 p.m. and 2.30 p.m., and no halt after 2.30 p.m., according to the NYSE.

If the Dow drops 2,700 points or 20 percent, there will be a two-hour halt if it happens before 1 p.m., a one-hour halt if the slide occurs between 1 p.m. and 2 p.m. and the market will
halt for the rest of the day if the slide happens after 2 p.m.

A plunge of 4,000 points or 30 percent -- no matter what time it occurs -- would result in the market being closed for the day. The previous trigger was slightly higher at 4,050 points.

Normal trading hours on the NYSE are 9:30 a.m. to 4 p.m.

http://www.cnbc.com/id/22465881