It's not a stock market - it's a casino.

[kentuck]

Nobody knows what happened yesterday. Or, at least, no one that knows is saying it out loud. It was a "fat finger". It was the technology. It was events in Greece. Maybe it was all or none of these?

In less than a half an hour, the stock market dropped about 1000 points. It was chaos and panic.

What caused it? I am not a believer in "accidents" in these types of situations. Somebody planned it, in my opinion. Call me a conspiracy theorist.

Dylan Ratigan, who knows the market about as well as anyone, said it was similar to the big investment banks. They trade on the market at the same 30 to 1 or 40 to 1 leverage that got us into trouble with the credit defaults. There is a deep and serious condition with the marketplace in this country and around the world. The stock market has adopted the same type of practices as the big banks that took us to the precipice.

At the same time this was happening, the US Senate was debating whether to break up the "big banks" that are "too big to fail". They were debating a "consumer protection agency" to regulate these gamblers. If there were Senators sitting on the fence, this huge drop in the market may have changed their minds? Maybe that was the intent all along?

[KharmaTrain]

1. The Drop Was Like 7 Minutes...

I was watching...it went from 300 hundred down to 980 and then back to 400...all within a few minute span. For someone to have broken the bank here...they would have had to had lighting fingers to buy in at the exact moments the market cratered...and then you would have seen a surge far beyond the bounce back as we saw followed by some massive sell-off and ripple in other markets. I didn't see that happen...the Asian markets were solid last night...and the Dow is opening slightly lower today.

That said, the market is a slippery slope these days. What "recovery" has occured has been thanks to the massive government bailout and speculation. It fears re-regulation as it's gotten fat on being able to run amock and having to be accountable is their worst nightmare. But they know changes are coming and trying to make one more run at the table before new pit bosses come in. Now I don't think we'll see an end to the gambling, just less loaded dice.

[spanone]

2. the house always wins

[Statistical]

9. Not in a positive expectation game. n/t

[spanone]

36. the house wins even when they lose...odds are you'll give it right back to 'em

[Bettie]

3. It is a casino these days

I must be mistaken about the origin of the stock market too...I thought it was supposed to be a long term investment vehicle where you give your money via stock purchases to companies to grow and as a stockholder, your investment would grow over time as well.

Now, it's an ATM.

Greed. It is at the root of all of this.

[Nicholas D Wolfwood]

8. Uhm, that original intent is still gambling.

You're putting money down with no guarantee of a return on that investment. The company could just as easily burn the money and go bankrupt as it could grow. I don't think it's at all become perverted, except by things like 401k and people putting their life savings into it, instead of being just something for very wealthy venture capitalists. The stakes are higher because we're all involved, but the essence of the system is unchanged.

[KittyWampus]

14. Investing in something with a view to the long term is very different than short selling and

investment vehicles that don't have an actual commodity at it's base.

[Nicholas D Wolfwood]

15. Quite true.

I just mean to say that regardless of the view (short or long), it's always been a casino. I think this is another case of us looking back and thinking things were better than they ever really were.

[Swede]

18. Except that it works in the long term.

Leave your money in for 20-30 years and you use the power of compound interest and make a nice pile of money.

[Statistical]

20. You are aware that stocks to represents companies with actual profits.

Profits that they return to shareholders in form of dividends.
Profits that grow over the decades if the company is successful.
As profits grow dividends grow and thus the company value rises.

I mean consumers buys something that profits goes to corporation.
The corporation is simple a middle man between the consumer wealth and the shareholders wealth.

[Statistical]

4. Tinfoil.

If anything this "planned event" which cost major brokerages billions is likely to increase pressure for Congress to reform Wallstreet.

Kinda like saying BP blew up their own rig because the spill crews are making lots of overtime.

[kentuck]

5. I think it is the opposite..

The Congress is afraid to touch it. It is too fragile. It is too explosive. So, they will do nothing, just like they did yesterday.

[global1]

11. Do You Think The Banks Were Sending A Message To Congress......

Something to the effect: Here's what we can do at a moments notice. So don't mess with us.

All I know is that when BushCo was throwing out signs that they might do something with Iran - I pulled the bulk of my money in stock funds out and just put it in cash funds. When the crash came - my principle was protected and I didn't lose anywhere near to what most did.

I'm still in cash funds. I have no confidence whatsoever in the stock market. Until Wall Street is regulated I know I'm not going back. I worked too hard for that money to have it blown away in seconds by emotional jerks that don't care about the little guy.

In my opinion Wall Street won't really thrive again until they accept some regulation. I know a lot of common folk like me that are just sitting things out. If we saw real reform - I think we'd jump back in - but until then - let these jerks lose their money.

[kentuck]

13. Only if you believe the market can be manipulated?

I think it can be. Who better than the big banks to do it?

[jberryhill]

6. Naw... casinos have better financial controls /nt

[htuttle]

7. Exactly... Casinos are actually regulated!

Frankly, the odds are looking better and better, too.

[kentuck]

10. Robert Reich calls it a "casino" also..

<snip>
Regardless of why it happened, it's further evidence that the nation's and the world's capital markets have become a vast out-of-control casino in which fortunes can be made or lost in an instant -- which would be fine except for the fact that most of us have put our life savings there. Pension funds, mutual funds, school endowments -- the value of all of this depends on a mechanism that can lose a trillion dollars in minutes without anyone having a clear idea why. So much of the market now depends on computer programs and mathematical models that no one fully understands, so much trading is in the hands of a few people whose fat thumbs or momentary carelessness might sink the economy, so much of global wealth now depends on who can move their money quickest at the slightest provocation -- that we are toying with financial disaster every day. The luck or foolishness of a few traders, and inside knowledge and information that some possess and others don't, combined with ultra high-speed computers, put us all at the whim of a system whose risk is way out of proportion to any public benefits.


http://www.huffingtonpost.com/robert-reich/the-almost-crash-of-wall_b_567551.html

[Loge23]

12. Planned or not, the SM is corrupt.

The Exchange's central, and original, purpose was to service the economy.
Now the Exchange has become it's own "giant squid" entity - a massive pool of money that serves itself first and the economy as an afterthought.
We used to think of people who espoused stuffing their mattresses full of their money as eccentric kooks. Now, it appears, this strategy is perhaps the safest route to take with one's savings.
Whether yesterday's fiasco was planned, a mistake, or otherwise; the market has been exposed, finally, as a corrupt cesspool full of our money. The Exchange exists now for greedy pigs and punks who have absolutely no concern with the economy or the individual investors' interests. It is, in every way but literal, a criminal enterprise.
In Greece thay are throwing molotov's at the police. On Wall Street, Americans should be gathering en masse to effectively purge and retake the Exchange from the pigs and punks that have hijacked it.
Everytime you hear about the absurd bonuses and salaries on WS, you should understand that those are real dollars coming, in part, from what your 401k and holdings should be getting.
And forget about the obvious greed angle for a moment if you can: If the market can be manipulated to this extent by "fat fingers", then what kind of damage can a hacker can do?
How's your retirement looking now?

[Statistical]

22. "How's your retirement looking now?" Just fine.

Day to day volatility is meaningless.

If you can't handle it pick some low beta stocks.

However if the economy recovers and companies remaing competitive then profits will rise and as a result the value of the companies stock rises too.

Still nobody should be 100% in stocks. Being 100% in stocks not understanding what you are doing and getting sick is like eating a diet of 100% icecream getting diabetes and saying ice cream should be banned.

A combination of:
Equities (stocks) - Commodities - Corp Bonds - Govt Treasuries - Cash

is very important to maximize return for a given amount of risk.

The market doesn't move in a straight line. It is up 70% in last year. Likely has gone up too much too fast a correction seems likely. If that concept is scary to you consider bonds. Many very solid real world companies have good yields on their debt right now.

[Odin2005]

34. No, the SM's function is to serve the Investor Class.

In is how they legitimize their parasitism.

[BanzaiBonnie]

16. People who would never gamble in Vegas

Gamble in the stock market all the time.

Investing in local business is something I can wrap my head around. Investing in things so foreign as some of what is done in the stock market makes no sense to me at all.

[grahamhgreen]

17. It is a RIGGED gambling casino.

[hedgehog]

19. Forget regulation; time to shut it down. Clearly the Stock market is

not serving the greater economy. There has to be a means to offer stock to investors, but this isn't it.

[Statistical]

21. No thanks.

Some of us are doing quite fine in the market.

A good mix of high yielding bonds, govt treasuries, some speculative stocks, and solid high dividend payers has done well even over the last decade.

You don't like it, you don't understand it. Fine nobody is forcing you to invest in equities.

[hedgehog]

23. "I got mine, screw the rest of you"?

As it happens, our 401k is doing just fine. What I'm objecting to is that Wall Street speculators are taking the rest of the economy for a ride whether we want to invest or not! When a mistake on Wall Street can send shivers through the real economy, it's time for a change.

[Statistical]

25. What shiver went through the real economy yesterday?

[hedgehog]

30. Ask the people who work at these companies and/or have

their retirement funds involved:

Accenture (ACN) fell from $40.13 at 2:45 p.m. all the way to just 1 cent before quickly rising back to $39.57.

Sam Adams maker Boston Beer Co. (SAM) also fell to a penny before recovering to $55.82.

Oxford Industries (OXM) tanked to $1.34 before soaring back to $19.51 a minute later.

But some other wild trades were not canceled by Nasdaq. For instance, Apple (AAPL, Fortune 500) traded down 22% to $199.25 before recovering, but those trades were upheld.

Most notably, Nasdaq did not cancel trades of Procter & Gamble (PG, Fortune 500) or 3M (MMM, Fortune 500), which momentarily fell 37% and 22%, respectively.

http://money.cnn.com/2010/05/07/markets/explaining_wall_street_turmoil/index.htm?cnn=yes&hpt=T3


A mistake by a single person turned the on paper value of these outfits to garbage. Most of the value was recovered, but why should these companies and those who depend on them be subject to the accidental or deliberate moves of an anonymous trader?

[Johonny]

32. I agree

The market exists because modern (heck even 19th century) economies need it. A non-stock market economy is ok I guess in a chicken trade based economy. But I'm pretty sure we all made fun of that idea a few weeks ago.

[Dreamer Tatum]

28. bullshit nt

[amborin]

24. K&R

[NNN0LHI]

26. Stock Market is no place for amateurs. Thats for sure

Neither is a casino.

But they won't let the professional gamblers in there.

In a casino if you keep losing you get to stay. If you start winning just a little too often you are going to find a thug in a suit under each of your arms as they unceremoniously throw you out.

Don

[AnArmyVeteran]

27. I can see the next headline: "Fat Finger causes Collapse of US Economy, World Doomed"

And some people think there is too much regulation!

[ladjf]

29. A Casino with no regulations. And,who is the "house" ? nt

[LanternWaste]

31. I have much greater faith in man's ability to...

I have much greater faith in man's ability to screw up than I do in man's ability to cover up...

[Odin2005]

33. The Stock Market is where the elites play with the wealth stolen from the workers.

[conspirator]

35. That's pretty much it. There is also another layer of power on top of those gamblers

The overlords that control the Treasury and the Federal Reserve, which probably control the MIC as well.
They actually print the monopoly money. So they don't even need to gamble.
The monopoly money is then used to pay the slaves for their hours of service.
The slaves then use that money to pay for their house, food and sevices.
So the monopoly money goes back to the owners of the capital that provides the Services.
And these capitalists then gamble the slave hours between them.