Talk me down: was the wild stock ride just a warning to pro-regulators not to fuck with the Street?

[havocmom]

Admission: I understand nada on the market. I do understand logic and have lived long enough to notice that some people will do anything to get their way, especially regarding money and power.

So many explanations flying around about what happened, why, and how. Yes, things happen too fast, and the technology has made it possible for really nasty stuff to cascade in instants, but... All at a time when a few people are actually looking at maybe, just maybe slowing the system and turning some lights on?

Please, show me why this was not a thug threat to would-be reformers and regulators that the lawless merchants of economic power might have set in motion. Looks like it might be muscle flexing to me. We already know the 'captains of (economic) industry' have no problem destroying huge segments of economies, and they don't even consider what it does to PEOPLE.

I grew up in the time of nuclear brinkmanship. Frankly, I think the present is much more dangerous. We have a brinkmanship game going on that does NOT assure total mutual destruction. SOME of the fat cats will survive anything, and pick their teeth with the bones of the masses they condemned to slow death through economic poison.

Talk me down.

[kentuck]

1. I think that is exactly what is happening..

They are telling Congress, "See what happens if you try to mess with the marketplace." Congress does not have the courage to do anything about it.

[Viking12]

15. You forgot something on your way out the door this morning...

:tinfoilhat:

[kentuck]

17. I got mine.

I think you forgot yours? :tinfoilhat:

[Viking12]

18. LOL. I'm not the one suggesting that volatility in the stock market is a coordinated effort

...to send a message to Washington.

[kentuck]

21. Does that mean you are right?

Washington voted down breaking up the big banks yesterday. Maybe that is not the reason they voted the way they did but it may have influenced some votes? Tell the band to keep on playing... :-)

[havocmom]

22. kinda makes one wonder sometimes

Really bad people get away with too much because most just don't think some could be so bad.

My being a bit paranoid does not prevent some being out to get the rest of us. ;)

[althecat]

24. Well said.

:Kick:

[glitch]

31. Exactly.

You do know what the hat is for, right?

[HowHasItComeToThis]

30. EXACTLY

[Dr Morbius]

2. The market is chaotic.

It is unregulated and completely out of control. This was a panic. Panics happen in stock markets but nowadays happen faster and are over faster. That's all it was.

Believe me, if they were able to manipulate the market like this they would have delayed the last recession. Wall Street would certainly have preferred a GOP win in 2008, and the economic collapse really did the righties in.

[althecat]

25. Nothing to see here... move on....

[no limit]

3. I dont know. Seems kind of silly to spite your face by cutting off your nose

Making the market panic would cost these people billions of dollars. Since their only goal is to make money that doesn't seem like a rational thing to do.

[althecat]

26. Pump and dump... its a modus operandi...

And it works. All you need to do is know when to be short....

[no limit]

27. So you create a panic and just assume that panic will go away?

How many people would need to be involved in this scheme? Shouldn't they be pretty easy to identify since they always know when to sell and buy?

[althecat]

28. No... you profit on the pump and on the dump...

And you deposit your earnings somewhere safe out of the reach of the IRS.

[AllentownJake]

4. If it is they should be careful

One of the Hedgies decide to off the reservation and do a margin call on one of the big boys.


:nuke:

The Euro is collapsing as a currency...I think this has more to do with that and a little bit of the BP mess for extra sugar.

[havocmom]

10. Now THAT is the one thing that makes me breathe a bit easier.

Thanks AJ.

I agree that, while it's a monster problem, BP is not the root of this noxious weed.

[trotsky]

5. Hell, if anything, this demonstrates just how chaotic and unregulated Wall Street is...

and how more safeguards need to be in place. If they're trying to send a message, I don't think it says what they THINK it says.

[Andy823]

6. I don't know.

I myself think it was simply a way for some of the big investors to make a killing! Many of them bought stocks back when they were at rock bottom prices, and now they have gone up, up, and up. It was time to rake in the "profits" and they did just that. Now they will let the prices drop again, buy up the cheaper stocks, and down the road they will pull the same kind of crap! Why, because they "CAN"! If we don't get tougher regulations it will continue to happen over and over. I think they wanted to make sure that "if" tougher regulations get passed, they cleaned up "before" those regulations take affect!

This to me is just another example of why we need some serious reform on Wall Street!

[no limit]

7. I dont know much about wall street but I doubt it's that simple

if someone is making money trading that means someone is losing money.

[havocmom]

9. Logical. I appreciate that. But, the big investors don't want pols tinkering do they?

That aspect still worries me. They don't want regulations and they can throw down a hell of a lot, which sets the electronic trading into motion. That goes off mighty fast and the snowball effect hits in seconds.

Fat cats taking profits seems to support my concerns more that belay them. Fat cats showing muscle, and making a profit, as always.

[westerebus]

8. Don't think so.

The Congress critters had already deposited their welfare checks, sorry, campaign contributions for their help with financial reform.

What happened might have just happened. As in sh*t happens. A robo program doing what its programed to do. There are many traders who short the market expecting it to dip. For them it was like hitting the lottery.

Someone inside made big money. Real big money. Or TPTB are just chumming the waters again. At this point the market is so rigged, the best you can do place your bet and bet with the house.

Sorry, this isn't very reassuring.

[Warpy]

11. It is more an argument in favor of regulation, isn't it?

After all, with HFT under control, volatility would be more under control. Get computers out and put trading back into the hands of brash young Republicans in three piece suits goggling at computer screens fifteen hours a day. Slow it down a bit and make it more difficult to do the kind of rapid fire trading that stuff like naked shorting requires.

Was this an example of naked shorting gone wrong (meaning gone noticeable)? I think only time and honest research will tell. We'll get the former but probably not the latter, stonewalling will kick in.

In any case, it seems obvious that the market is being diddled, obvious even to capitalist true believers. Even they resent having the invisible hand fairy overridden by crooks, so this is a time for regulation, not killing it.

[AnArmyVeteran]

12. This is a perfect example of why more regulations are needed on Wall Street...

Everything on Wall Street is too big to fail. There is too much control by a handful of the most dishonest, opportunistic, greedy and sociopathic people. I don't buy the 'fat finger' excuse or that it was a 'glitch' that caused the 1,000 point drop yesterday. If the system is that complicated it needs to be simplified, broken up into tiny pieces and have steroid-like regulations imposed on it. If simplicity is genius, then Wall Street is a shining example of absolute idiocy. So why should we trust our country and our future to the most dishonest people on the planet? We will have spent trillions on the war against terrorism because less than 3,000 people were killed on 9/11. When a Wall Street gang decides to destroy millions of people's lives and virtually destroy our economy isn't that the equivalent of terrorism?

This is a national defense issue. Why should we worry about an enemy outside our borders when a handful of billionaires on Wall Street can destroy our country at their slightest whim? We need caps on everything on Wall Street...

[Better Believe It]

13. The answer to your question is ..... NO.

Those warnings are being effectively transmitted to Congress via the White House.

[harun]

14. I don't think so.

What we had yesterday was extreme volatility in currency markets and people freaked out about the Euro moved to the dollar and the yen. I believe Japanese markets had been closed earlier in the week and this brought on huge volume. This volume with a possible fat finger trade tripped a bunch of the big electronic traders to move from stocks in to other areas (likely currency, gold, treasuries).

I don't think we will ever know the whole story but that scenario to me seems like such volume had moved that almost all buying of stocks from the big electronic traders had stopped. The pricing of a number of stocks just had the bottom fall out when that happened. The system didn't read it right and the actions by electronic traders made it worse.

Like most of the commentators I think they need to slow things down. Promote investing, not micro-trading for fractions of cents in a thousand of a second.

[havocmom]

16. "fat finger" is a real catchy (read: made for media) phrase

but the m and the b on the keyboard are not fat finger positioned ;)

Even I know things need to slow down so actual thought might have a chance, but greed has become such a rabid thing that its partner, fear, seems to be riding the lead horse of the stampede.

or is it actually more thought out and just playing the nature of the herd?

[Kurt_and_Hunter]

19. No, it's an accidental encouragement to regulators

Yesterday was as useful to deregulation folks as the oil spill is to drill-baby-drill.

[havocmom]

29. Oh, so that;s why they voted to break up 'too big to fail' banks

...errr, wait a minute, that's not what happened, is it?

[Seneca]

20. Europe's instability is the main influence right now

The entry error yesterday was just stupidity in action. The schools are turning out less prepared students more and more, and we will continue to see the fruits of education cuts in the months and years to come. (I first noticed a trend in the late 90's/early 00's that more and more marquees and other public signs have serious spelling and grammar errors, which to me was the first canary in a coal mine that Teh Dumb is getting bigger - the Teabaggers are certainly an extension of this trend).

So what we had yesterday was very real fears due to the instability in Europe's markets AND some careless clown who is under-qualified to flip burgers, let alone work on Wall Street.

There is no grand conspiracy. But the fact that so many subscribe to such on here surprises me not.

[althecat]

23. I will happily talk you up..... not down

:kick:

[gravity]

32. They just gave a reason for more regulation

If Wall Street wanted less regulation, they would show that the markets are stable.

[havocmom]

33. LOL. pols posture for rational views; they RESPOND to power

[gravity]

34. Wall Street was showing its lack of power

in being able to control the markets.

[gleaner]

35. No ....

The stock market is and always has been volatile. The extent of the volatility depends on a lot of factors. I don't think that anti regulation people could or would cause a huge plunge downward. First of all they don't control each and every individual who trades, and secondly it would cost them a lot of money, with that being the operative deterrent.

When the market was up and so many people were saying that the economy was out of trouble a few weeks ago, it was pointed out to them that this could happen. They were not going to hear it. So, here it is. The market as a whole has never recovered fully from 9/11. It is now tied to the stock market of other countries. Australia just had a big slump and that is one of the countries we are tied to. It isn't just an isolated incident it is both a micro and macro economic problem.