Dow plunging

[Dback Jon]

996 points down

 

[CaptTurbo]

I see 300 did it really hit 900?

 

[LVG]

At the low today it hit 9977.39 at 14:48.

http://www.google.com/finance?client=ob&q=INDEXDJX:DJI

 

[CaptTurbo]

wow. talk about apanic. Wish I had money in my account I would have bought when it was down 900.

 

[Russ Smith]

CNBC is talking about how today looks to be some "sketchy" trading. At one point the DOW was down over 1000. Procter and Gamble and Apple in paricular have bizarre trading patters, P&G was just over 60 and then suddenly traded at 40(range is 62 to 39 today). Apple went from 240 to 199 in a matter of a couple of minutes. If you look at the charts just past 2pm EST everything fell off a cliff and CNBC is speculating it was some sort of glitch or fraudulent trading situation that caused a panic sell.

Great buying opportunity if you had the money and the guts to buy when the market fell that hard. It went from down 80 to down 800 in about 90 minutes.

Yahoo finance has been down for at least 45 minutes I assume the sheer volume has overloaded it. The volumes of shares traded today is insane too.

 

[82CardsGrad]

Just the beginning... Greece is indeed the canary... the Paul Revere sending the initial warning.
The charade has been exposed. Printing funny money can only last so long. Increasing tax burdens on populations that are unemployed and/or are watching their earnings drop like lead balloons is part of the charade as well. x% of nothing = nothing... So sure, hike taxes... at your own peril... and then sit back and digest the Greek story. Debt to GDP levels are now officially out of control and unsustainable... This is true at a country level, state level and local level... Here's a clip from a recent CNBC report:

"Out of the world's 75 largest economies, the United States has the 20th largest as debt-to-GDP ratio, standing at 94.3%, with a gross external debt of $13.454 trillion and an annual GDP $14.26 trillion. In fact, out of the largest 75 economies, this number is just above the worldwide average of 90.8% Western-European and North American countries dominate the upper end of the spectrum, with Switzerland (422%) and the United Kingdom (408%) at the #2 and #3 spots, respectively, and Ireland representing the most drastic debt-to-GDP ratio. According to the most recent World Bank data, Ireland's number stands at a staggering 1,267%."

Spending your way out of a recession feels good doesn't it??

 

[Russ Smith]

CNBC says the DOW fell 700 points in 15 minutes and recovered 600 in 20 minutes. Down from 490 to 390 in 2 minutes while I was typing this.

They're talking at length about high frequency trading and program trading because a lot of the big sells during the dump appear to have been not individuals but just big funds that had stop losses and when the market suddenly tanked those orders went off automatically contributing to the panic.

3M went from 85 to 68 in a matter of minutes on trades that totaled just 4000 shares. So something is definitely fishy.

 

[82CardsGrad]

Words from a very wise man, essentially saying what I was trying to say above!

Greek Debt Crisis On Verge Of 'Going Global': Pimco's El-Erian

Published: Thursday, 6 May 2010 | 1:44 PM ET

Problems with Greek debt are about to spread to other countries and could infect the US unless the nation tackles its own mounting problems, Pimco's Mohamed El-Erian told CNBC.

About an hour or so after El-Erian spoke, global stocks sold off sharply with major US averages shedding more than 3 percent.
Speaking as Greek austerity measures won enough votes to be approved by parliament, El-Erian offered a stern warning about the potential of the crisis to escalate into something resembling, though not duplicating, the 2008-09 financial crisis.

"We've seen a crisis start in a country—Greece—become regional, impact the whole of the Euro zone and is on the verge of truly going global," said El-Erian, CEO of the world's biggest bond fund.
He said the debt is a "transmission mechanism to go from country to region to global. So we should take this very seriously."

S&P 500 banks fell financials fell nearly 5 percent as investors worried about the financial system freezing up again, similar to what happened when Lehman Brothers collapsed in September 2008.
One trader who spoke on condition of anonymity said fixed-income desks in Europe shut down early for the day and that "European banks are halting lending now."

Similarly, the US faces a debt burden that, while not as large a percentage of gross domestic product as Greece, is approaching that level and could spark major problems domestically.

"We are not Greece. We have more time. But what the Greek crisis tells you is debt and deficits matter," El-Erian said. "The structure of your deficits matter and the US doesn't have much flexibility."
"Don't underestimate how quickly this can happen," he added. "There are structural headwinds out there and we better get our act together before those structural headwinds become overwhelming."

For now, the Greek crisis actually could provide opportunity in the US as assets in riskier European markets are parked in more secure locations.
The downside is that those assets are largely flowing to US bond markets, while stocks are getting pounded by the uncertainty the crisis has sparked.

"What you see is the system slowly starting to have cascading failures. It's like a pipe that you need to be free-flowing and it starts to clog, and that's a concern," El-Erian said. "This is a shock to the system and it's going to have an impact on valuation."

 

[Russ Smith]

82 I agree with your general point but more and more today is looking like some sort of trading glitch that just took off. CNBC says that Accenture went from 42 to .01, yes ONE CENT today briefly. It's ACN look it up the range is .01 to 42.30. As they're pointing out that almost assuredly has to have been a mistake but it happened across the board with a lot of stocks falling dramaticallY(not that much) one one small trade.

A conspiracy theorist would say Obama wants to pass more controls on the markets and the best way to do that is to have a massive upheaval day where it looks like the market is being manipulated so that people are more open to more controls. I think it's more likely there was some technical error or some intentional trading issues that weren't caught in time to stop the panic sell off.

 

[CaptTurbo]

Remember George Bush one xmas a few years ago.

"Wanna help fix the country? Go out and buy stuff!"

 

[Russ Smith]

CNBC says the SEC is already looking into what appears to be "errant trades" involving Procter and Gamble and others. Apparently one trade through Citi for P&G was entered as a b for billion instead of an m for million(they can't even have a billion shares to trade?). SEC is looking into possibility that multiple errant trades led to the huge drop and then all the auto sell programs kicked in and continued the collapse.

 

[jefftheshark]

82 I agree with your general point but more and more today is looking like some sort of trading glitch that just took off. CNBC says that Accenture went from 42 to .01, yes ONE CENT today briefly. It's ACN look it up the range is .01 to 42.30. As they're pointing out that almost assuredly has to have been a mistake but it happened across the board with a lot of stocks falling dramaticallY(not that much) one one small trade.

A conspiracy theorist would say Obama wants to pass more controls on the markets and the best way to do that is to have a massive upheaval day where it looks like the market is being manipulated so that people are more open to more controls. I think it's more likely there was some technical error or some intentional trading issues that weren't caught in time to stop the panic sell off.

A less trusting person might think, "hey, I wonder if someone knew in advance that a HFT algo trading program was going to dump all at once and create a once in a lifetime buying opportunity?"

If we had someone at the SEC who actually gave a crap, you might see them looking at who was trading during that 5 minute period where the market bottomed out.

But they won't.

JTS

 

[conraddobler]

A less trusting person might think, "hey, I wonder if someone knew in advance that a HFT algo trading program was going to dump all at once and create a once in a lifetime buying opportunity?"

If we had someone at the SEC who actually gave a crap, you might see them looking at who was trading during that 5 minute period where the market bottomed out.

But they won't.

JTS

The wheels of justice grind slow, or sometimes not at all but one day they will grind very very fine IMO.

If not well there's always next football season

 

[Russ Smith]

CEO of the NYSE says some of the errant trades with Procter and Gamble "may be taken off" and other stocks too. We'll see but it looks like CNBC and others highlighting this may actually get some action taken.

 

[Russ Smith]

Here's the story about the alleged mistake by Citigroup that may have triggered this.

http://finance.yahoo.com/news/Trading-Error-at-Major-Firm-cnbc-434682061.html?x=0

"A human trading error at a major firm was the root cause of Thursday's sudden, 9 percent selloff in U.S. stocks, sources told CNBC.

Multiple sources said a trader entered the letter "b"-as in "billion"-when he or she meant to type "m," for "million," shortly before 2:47 p.m. New York time.

U.S. stocks plunged suddenly, briefly by more than 9 percent, before pulling back to a near 3 percent drop, as investor worries mounted that Greece's debt problems could spread.

Sources also told CNBC that the firm in question is Citigroup.

Citigroup (NYSE: c) said it has no evidence of a bad trade but it is investigating the situation.

The New York Stock Exchange reported there were no computer glitches in its systems Thursday.

Separately, Nasdaq said it was working with other major markets to review the market activity that occurred between 2:00 p.m. and 3:00 p.m. "


Note, the CEO of NYSE has since said some of the trades may be cancelled as they appear to be erroneous.

 

[82CardsGrad]

Heard a great interview with Maria Bartaromo and Duncan Niederauer, CEO of the NYSE. There were no errors... It was a result of the way the markets are now structured.. Regardless, the market was heading toward a horrendous day. And tomorrow morning is going to be UGLY as well... We might see a bounce-back by the end of the day tomorrow, but don't count on it.
Here's the interview by the way: http://www.cnbc.com/id/15840232/?video=1487130975&play=1

 

[Russ Smith]

Heard a great interview with Maria Bartaromo and Duncan Niederauer, CEO of the NYSE. There were no errors... It was a result of the way the markets are now structured.. Regardless, the market was heading toward a horrendous day. And tomorrow morning is going to be UGLY as well... We might see a bounce-back by the end of the day tomorrow, but don't count on it.
Here's the interview by the way: http://www.cnbc.com/id/15840232/?video=1487130975&play=1

No that's the exact interview I'm referring to, in it he very clearly says there were "erroneous" trades. What he said was they weren't on the NYSE because they closed the trading on it for 90 seconds. He said that they will very likely take trades "off the tape" for PG, MMM, Accenture etc. He said he doesn't think it was a technical problem it was that the computers looked for a sale and there were so few available trades that some thinly trading electronic markets executed on VERY low trades that wouldn't execute on a larger market, that caused the price to suddenly go down and then panic set in.

For example they closed PG for 90 seconds it reopened almost where it was before they closed it. He said he thinks 39 trade will be cancelled.

 

[82CardsGrad]

No that's the exact interview I'm referring to, in it he very clearly says there were "erroneous" trades. What he said was they weren't on the NYSE because they closed the trading on it for 90 seconds. He said that they will very likely take trades "off the tape" for PG, MMM, Accenture etc. He said he doesn't think it was a technical problem it was that the computers looked for a sale and there were so few available trades that some thinly trading electronic markets executed on VERY low trades that wouldn't execute on a larger market, that caused the price to suddenly go down and then panic set in.

For example they closed PG for 90 seconds it reopened almost where it was before they closed it. He said he thinks 39 trade will be cancelled.

That was my point... people are attempting to find fault with an actual trader, when it was the "system" that actually caused the snafu...

 

[Russ Smith]

That was my point... people are attempting to find fault with an actual trader, when it was the "system" that actually caused the snafu...

Ok, I see that point. But that's his opinion that this CITI trader didn't cause the problem, right now nobody knows. CNBC was reporting during Cramer that several of the trades will be cancelled, any trade that executed 60% or more above or below market will be cancelled which includes many of the trades CNBC was citing as "erroneous."

What they're saying is that by rule those trades shouldn't have been allowed but the exchanges were very small and somehow let them through.



It doesn't look like one bad trade caused the tank job at the moment .

The crappy thing is even if they cancel those trades for the individual investor you won't get back what you lost on paper. I'm actually surprised I'm only down 5K today in my IRA's (10K for the week) I was expecting twice that. We'll see if that changes as they cancel trades, I doubt it.

 

[82CardsGrad]

Ok, I see that point. But that's his opinion that this CITI trader didn't cause the problem, right now nobody knows. CNBC was reporting during Cramer that several of the trades will be cancelled, any trade that executed 60% or more above or below market will be cancelled which includes many of the trades CNBC was citing as "erroneous."

What they're saying is that by rule those trades shouldn't have been allowed but the exchanges were very small and somehow let them through.



It doesn't look like one bad trade caused the tank job at the moment .

The crappy thing is even if they cancel those trades for the individual investor you won't get back what you lost on paper. I'm actually surprised I'm only down 5K today in my IRA's (10K for the week) I was expecting twice that. We'll see if that changes as they cancel trades, I doubt it.

About 3 weeks ago I shifted 50% of my 401k into a PIMCO Total Return fund... GLAD I did that... it was actually up a few pennies today!

 

[Russ Smith]

About 3 weeks ago I shifted 50% of my 401k into a PIMCO Total Return fund... GLAD I did that... it was actually up a few pennies today!

I actually have about 40% in cash right now or I'd be down quite a bit more today.

 

[82CardsGrad]

I actually have about 40% in cash right now or I'd be down quite a bit more today.

The PIMCO Total Return Fund typically keeps about a 50-50 ration between cash and a variety of Bond investments. Sorta gives you the stability of cash with the upside return potential of the bond investments...

 

[jefftheshark]

Perhaps being missed in all this is the fact that the market was plunging today all on its own. The Greek crisis, when coupled with the news coming out of Washington about the breakup of the TBTF's, was far more of a culprit than anything being posed on CNBC. I for one added to my FAZ (3X short financial) position about 20 minutes prior to the meltdown based upon the Washington news alone - who knows how many traders out there were thinking the same exact thing?

When the market went to -500 down, I have to say that I wasn't too surprised. And if it drops 500 tomorrow, I won't be shocked either. (VIX futures right now are predicting a lowered opening for Friday).

There was a rumor out there at the same time the market cratered, that the European Banks were closing their lending desks because of a liquidity issue. This is exactly what happened just prior to Lehman going TU.

Because it was late at night, these rumors were not confirmed, but it is safe to say that there is more than meets the eye here.

And one cannot discount that the computers at the PPT saw what was going down, and immediately jumped in and started buying, too. And if they did, then a "fat-fingered rogue trader" would be exactly the kind of story they would float out there to cover it up.

That being said, The April UE #'s are due out before the opening, and a good print here could help to offset all the current negativity. But as for myself, if the market heads up tomorrow, I'll probably just take this as an opportunity to add to my shorts.

As usual, this isn't advice, just an observation.

JTS

 

[82CardsGrad]

Heard a great interview with Maria Bartaromo and Duncan Niederauer, CEO of the NYSE. There were no errors... It was a result of the way the markets are now structured.. Regardless, the market was heading toward a horrendous day. And tomorrow morning is going to be UGLY as well... We might see a bounce-back by the end of the day tomorrow, but don't count on it.
Here's the interview by the way: http://www.cnbc.com/id/15840232/?video=1487130975&play=1

Perhaps being missed in all this is the fact that the market was plunging today all on its own.

I think we were saying the same thing buddy...

 

[jefftheshark]

I think we were saying the same thing buddy...

JTS