Is the stock market going to tank?

[4matic]

Regulate HF trading. Companies have value! NYSE Euronext stock is well positioned to handle regulated trading. NYSE symbol: NYX


Futures are steady.

[Kevo]

I think this was more than a glitch. Somebody somewhere was testing a plan to see if it would work This certain person (or group of people) now know that they can actually manipulate the markets like they thought they could.

The question is....who the fuck are they?

[4matic]

I think this was more than a glitch.

You know what.. It really wasn't. Bad trades have been around forever! It's just the consequences were not as dire. We need a better matching system.

[coreshot-tourettes]

Everyone knows this same thing was going on right before Lehman blew, right?

[char]

So you are telling me that some guy can really type in a "b" instead of an "m" and he doesn't go over a pre-programmed limit which requires someone elses authorization? Or a big red box with saying: are you sure you want to do this?

[coreshot-tourettes]

So you are telling me that some guy can really type in a "b" instead of an "m" and he doesn't go over a pre-programmed limit which requires someone elses authorization? Or a big red box with saying: are you sure you want to do this?

That's the thing. There are numerous trade confirmations and layers of authorization on orders that large. That's why I and a lot of other people are saying this may have been organic, set off by a liquidity halt in the EU.

Here's the IB release:

Latest IB Notice

To all traders:
Thu May 6 21:49:58 2010 EST

UPDATE TO TRADE CANCELLATION NOTICE



IB has received notice from the venues listed below of their intent to cancel all stock trades executed between 14:40:00 and 15:00:00 which were executed at a price greater or less that 60% away from the consolidated last print in that security at 14:40:00 or prior. Each has also provided notification that this decision cannot be appealed. While we continue to await confirmation from all venues as to which stocks are affected and the break points at which the cancellations will take place, it now appears likely that the information will not be delivered within the timeframe necessary to be posted to your account until the morning. It should also be noted that IB has received no notice from the U.S. option exchanges or futures exchanges as to whether or not they intend to take similar action.



Again, once all relevant information has been determined, IB will act to process any resultant position and cash changes to your account and will provide notification of this action via email and TWS bulletin. As such changes may adversely affect account equity and/or margin compliance, account holders are advised to monitor their accounts and manage their risk accordingly.


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[char]

That's the thing. There are numerous trade confirmations and layers of authorization on orders that large. That's why I and a lot of other people are saying this may have been organic, set off by a liquidity halt in the EU.

Here's the IB release:

Meaning someone at citi really wanted to sell a billion instead of a million. So, why would any of the other trades resulting from that decision be invalid.

I don't get it, everyone knows that these algorithms are at work, so suddenly when we don't like the result we get a do over? WTF?

[4matic]

That's the thing. There are numerous trade confirmations and layers of authorization on orders that large. That's why I and a lot of other people are saying this may have been organic, set off by a liquidity halt in the EU.

Here's the IB release:

Sounds like a NASDAQ problem.


I thought the $INDU was only calculated off resident trade?

[4matic]

Meaning someone at citi really wanted to sell a billion instead of a million. So, why would any of the other trades resulting from that decision be invalid.

I don't get it, everyone knows that these algorithms are at work, so suddenly when we don't like the result we get a do over? WTF?

A trader could have snapped or tested the system. Easily.. We need a strong regulatory structure for the markets to work. Bring back the Specialist!

Gold getting hit right now.. Interesting.

[woodstocksez]

Everyone knows this same thing was going on right before Lehman blew, right?

Meaning?

[Hugh Conway]

Meaning?

It's time for another installment of market mumbo jumbo. I like tits in my mumbo-jumboists.

[Benny Profane]

Yup, this is going to do wonders for attracting the retail investor back into the market.

[grapedrink]

Yup, this is going to do wonders for attracting the retail investor back into the market.

no kidding, the fact that one error by one person can leads to a 1000 point drop in the dow and send hundreds of stocks and etfs to zero, even if only for a few seconds, doesn't exactly instill confidence in the stock market.

[Tuckerman]

I'm trying to follow along so tell me if I'm missing something. So someone hits b (maybe to their benefit, maybe by mistake) and some shit gets traded at $.01 which would be great for the person doing the buying. But then it's all canceled?
Is it possible that some people make bank while others who were not supposed to get rejected?
Will they also cancel all trades just before and just after?
Are all transactions a public record?

[4matic]

Been buying stock all morning.. Wish me luck..

Shorted bonds

Long oil.

[SKIORFORGETIT]

dow is down 165 pts


looks like my dad was right

[char]

Why we allow HFT is beyond me. Liquidity my ass.

How anyone can invest in a market that by all appearances seems to be rigged is beyond me.

[/un-sophisticated investor]

[ICEHOCEY77]

[Spats]

How anyone can invest in a market that by all appearances seems to be rigged is beyond me.

How people can blow money in casinos they absolutely KNOW are rigged is beyond me. Yet it's a multi-billion-dollar industry.

I think investing always looks easy before you do it, because it's easy to see what you should have done in retrospect and why. But it suddenly gets a lot harder when you have to put your money down.

[Benny Profane]

WSJ

Number of the Week: 29.4 million unemployed and underemployed

Karl Marx was disastrously wrong about a lot of things. But if the job market keeps growing as slowly as it has the past few months — even with April’s 290,000-job boost — the U.S. economy could soon find itself in a place he’d recognize.

In Das Kapital, Marx described a problem he saw in the way capitalist societies function. As companies became more productive, learning to get more from their workers, they would need fewer and fewer of those workers. This would create an “industrial reserve army” of unemployed people, whose desperation to work would keep the fire at the heels of those who had jobs and keep wages in check. As a result, all the added value created by workers would accrue to the owners of the companies.

As Marx put it: “The condemnation of one part of the working class to enforced idleness by the over-work of the other part, and vice versa, becomes a means of enriching the individual capitalists.”


Lately, the U.S. recovery has been displaying some Marxian traits. Corporate profits are on a tear, and rising productivity has allowed companies to grow without doing much to reduce the vast ranks of the unemployed. Not counting temporary U.S. Census jobs, nonfarm employers have added an average of about 143,000 jobs in each of the past three months. That’s just about enough to compensate for the natural growth in the labor force.

The U.S. Labor Department estimates there were 14.6 million people actively looking for a job in the U.S. as of April, 7 million of whom had been searching for more than six months (these numbers aren’t seasonally adjusted). Another 5.9 million wanted a job, but hadn’t searched recently, while 8.9 million were in part-time jobs but wanted full-time work. Grand total: 29.4 million people. Industrial reserve army, anyone?

High unemployment has been good for shareholders, as companies reap the benefits of productivity gains in the form of profits, rather than paying higher wages. Among S&P 500 companies that have reported first-quarter earnings, profits are up 61% from the same period last year. By contrast, the average hourly wage was up only 1.6% in April from a year earlier, not adjusted for inflation.

To be sure, this isn’t necessarily a recipe for class struggle. Many workers are shareholders, too, through pension funds and 401(k) plans. Beyond that, many economists expect hiring and wage growth to come back quickly. If and when that happens, productivity becomes a force for good: The more each person produces, the more wealth there is to go around.

Still, the contrast between executives reporting bumper profits and millions of unemployed trying to make ends meet doesn’t bode well for social harmony and political accord.

[woodstocksez]

WSJ

Number of the Week: 29.4 million unemployed and underemployed

...

Of course, the roster of businesses isn't static. The unemployed can work out some type of self-employment. Entrepreneurs can create new businesses that provide opportunities for the unemployed. Of course there are barriers to doing those things, and it's a lot easier to state the possibilities than to actually realize them, but the fact is that the article just ignores that aspect of the system.

[L7]

A couple of years back during the bubble I cited the examples of the '87 crash and the Hunt brothers manipulating the Silver market in a financial thread. Someone admonished me that those things were old news and can never happen again because of safeguards.

This new mess sounds a lot like the programmed trading that caused the '87 crash. As well the manipulation of debt markets and real estate bubble isn't that much different then the silver manipulation. They aren't the exact same thing but functionally they're pretty damn similar.

For me the greatest sign things are about to hit the fan is all the clowns running around saying, 'it's different this time' and 'that can't happen again'. That is the attitude that indicates complete overconfidence like the 'new economy' of the late 90's when shares didn't need actual earnings to support their huge inflated values.

The only thing this market has going for it is people are still wary. At the same time the big hitters are trying to hype a weak market well ahead of it's time.

I wouldn't be surprised if that little crash the other day wasn't just a test to see where weaknesses in the system could be exploited.

Problem is it's a system that is largely policed by within and used to being exploited constantly by those within it and those controlling those within it.

[Benny Profane]

What's most disturbing, or, harmful to the markets in general, is, at this point, we still don't know what happened. http://www.nytimes.com/2010/05/08/bu...rading.html?hp Or, maybe somebody knows, and they just aren't telling us. Either way, if you believe in the theory that the market run up was just a pump and dump scheme to lure the retail investor back in, it was a miserable failure. Somebody jumped the gun big time and screwed the pooch in the butt, because all of the little people who were just now sneaking back into the stock market will flee back to safety, maybe never to return again. Most are boomers who absolutely cannot afford to lose any more capital, now that the end game is rapidly approaching. This is no longer, in any sense of the word, investing. It's not even gambling. It's playing with fire, and only idiots allow themselves to get burned more than once, let alone three or four times. Would you believe the SEC or any other investigator next week when they come up with a story as to how this happened? Not me. There is just way too much systematic corruption today, and our owned politicians have no desire at all to fix this fucking system. The same day that this happened, the politicians working on the so called financial reform bill voted down the provision that large banks should be broken up into more manageable pieces. The argument is that all of this churning of money that benefits no one but the churners will move off shore if we regulate it too much, and this is being used at the same time Euro banks are locking up because their financial system is crashing. Krist.

I'm not a conspiracy theorist, but, I would love to see that FED audit, because I really think that they could easily be behind a lot of the stock market run up. Where else has all of this buying come from?

[LeeLau]

One indicator I've tried to use for bubble markets is the number of retail accounts opening (Schwab and eturd publish numbers). But those numbers lag so you can't really forecast all that well using them plus there it doesnt account for dormant accounts.

But i am getting some sense from looking at daytrader irc or chatroom channels (very unscientific i know) that the dumb money dice rollers magic-chart juju suckers were coming back to the markets. Therefor liv2skis idea of biasing short side appears pretty good - but then again - who the fuk knows what koolaid the Fed will use to prop this market up. Just when you think they cant possibly print more debt - they do

[amatog]

Be Greedy when others are fearful and be fearful when others are greedy.

People saw Greek rioting on TV and the implications of government spending more that it can "Harvest" from private industry = a nightmare that may be coming true in the US someday soon as well.

But, don't worry Obama and the Congress will investigate the 998 point drop on Thursday and make sure Wall street will be held accountable. Right after Sen Arlen Spector fishes up with the inquiry into the NE Patriots videotaping issue.

Be afraid, contrary to Snoop, the revolution will not be televised.