patrick.net

because stupid politicos of Greek borrowed too much, American pensions and 401Ks are tanking...

gotta 'love' the global economy!

700 points down at one point!... wow!

990 pts down at 2:50 EST. Holy crap.... it's now swinging 100pts in a few sec. This is crazy. Must be a heck of day for day trader.

Holy sh@t... DJIA graph looks like a cliff. This is what happens when you have a lot of stop limits and a big correction. Now it's almost back to normal. What a crazy day.

This is what I don't understand: My GLD has been going up up up lately, but in the last few days, my SLV lost like 6%. How come my gold can gain a few % and my silver can lose so much at the same time? Surely there's some arbitrage opportunities here, but it puzzles me that my silver investments are always so quick to drop and slow to rise, while gold is just up up up.

It's fear that will stall this recovery... People think 2008 is behind us.. Big sell offs like this remind people not to be too bullish...

Well the DOW had a big drop and then came up to settle at a 347.80 drop to rest at 10520.32 at closing. That's a whopping -3.20%. Nasdaq and S&P did no better. Even Treasuries slipped a bit.

What recovery? Can you say, "Double Dip?"

Let's see how flexible the ECB and the European Union can be. They wanted to rival the US dollar, and they just might if they can get their acts together.

SF ace says

Proctor and Gamble (as boring as can be) dropped $23 this afternoon and bounced back up down $1 to around $60. If a had a stop order at $40, I would demand the trade to be reversed. It is a reminder why I don’t like stops. Computer trading is taking over, where is human interaction?

It appears to be human error which caused the selling on PG. Gotta be carefull these days.

http://finance.yahoo.com/news/Stocks-extend-plunge-on-apf-892184148.html?x=0

Computerized error may have caused the sell~off. Wild ride and all because of a typo of $16BILLION when the trade was supposed to be $16MILLION.

But I think there is malfeasance here from person or persons who may have gained billions in a matter of minutes. I smell a rat. Let's see how the market reacts tomorrow.

Pffft....someone typed $16Billion instead of $16Million....lol. What trading software requires typing in your numerical value as a string? Seriously????

This is another stock market bubble that needs correcting....and the PPT was there to control it....a controlled fire of sorts.

If it was a computer error. Why did the market go down today? Shouldn't it bounce?

Someone plans to sell lots stock but don't want to bring the whole market down. I suspect he will try to sell in the next few weeks or even months. I bet we will see DOW 8000 or lower again.

xenogear3 says

If it was a computer error. Why did the market go down today? Shouldn’t it bounce?
Someone plans to sell lots stock but don’t want to bring the whole market down. I suspect he will try to sell in the next few weeks or even months. I bet we will see DOW 8000 or lower again.

Did the market close already? I was under the impression that the market was still open and that trading was still going on.

I'm really curious what "technical level" triggered such an amazing response. Listening to CNBC trying to explain what happened is like listening to my mother's bible study group explain the earthquake in Hati.

The market was on quite a tear Feb~May, moving from 1050 and hitting and bouncing off 1220 twice in April.

One truism of technical analysis is that there are double tops but there are no triple tops.

Traders had a lot of profit on the table at 1200 and nobody wants to be holding during a 5-10% correction, so after the trading trend turned downwards a bumrush for the exits is expected.

This is just the trading psychology, apart from any actual macro situation with energy prices, the European credit thing, yen FX, etc.

Up about 330 points with a little less than an hour before the closing bell. Let's see what happens tomorrow.

Does anyone remember that during the Great Depression, the stock market didn't simply drop and stay there? It had a few bounces, kind of like a dead cat hitting the pavement after being dropped off of a skyscraper. Something tells me that this cat ain't gonna meow or purr for a long time.

simchaland says

Does anyone remember that during the Great Depression ...

What do we expect from a bear? :)

The government did lots things wrong during the great depression, such as raise tax and people lost money from a regular saving account. Hopefully we don't see another great depression again.

simchaland says

It had a few bounces, kind of like a dead cat hitting the pavement after being dropped off of a skyscraper. Something tells me that this cat ain’t gonna meow or purr for a long time.

US market responsed to europe $1 Trillion bailout plan. It also is what made Asian market go up yesterday, and 9% roaring up in some european countries today. In addition to $ 1T european bail out, Fannie mae is asking for 8.4B, Freddie Mac is asking 10B, Japan is pouring $22B into japanese market.

It eliminated short term instability though, it basically is "paying debt with another debt" approach. The amount of debt is growing. That approach is what lead US into this ugly mess at the first place and is happening in whole world level now. And, Sorry Greece. I only have little faith on you. Do something right when you got bailed out. OK?

Anyway, the market had responded, and the news is used up. We don't have fresh news. I think we will see another 100 pts or so, then start go flat for a while.

Just watched American Experience: The Crash of 1929 on NetFlix. The show tries to cover what happened leading up to Oct. 1929, not the crash itself or what happened afterwards. According to the show the government did nothing leading up the final two crashes and there where allot of almost crashes before Oct. that the bankers themselves stop by throwing money at the market. The main issue according to the show was that almost all the little guys were buying on margin and they all finally lost faith in the bankers to save the market with bailouts.

If I was going to parallel the story as the show told it to what has been happing in the last few years, I would say we have not seen the “real” market crash yet. What we have seen is small crashes that can be stop by throwing money at them. The show suggests that at least one of the bankers through allot of money in on Thurs through Tues to no avail meanwhile the government agencies were largely silent.

My only real take away from the show was the government had almost nothing to do with the stock market until after that Thursday in Oct. What the government did after the crash is almost irrelevant, what we really need to understand is how the almost completely unregulated market got there in the first place. Frankly I find it beyond believable they stop early crashes from happening by actually running around on the floor shouting buy orders significantly above the last bid to get everyone exited.

I am sure this show misconstrued some things, but I think the general story is worth understanding and now I have better questions to ask about pre-Oct. 1929 stock market history.

Enjoy….

simchaland says

Does anyone remember that during the Great Depression, the stock market didn’t simply drop and stay there? It had a few bounces, kind of like a dead cat hitting the pavement after being dropped off of a skyscraper. Something tells me that this cat ain’t gonna meow or purr for a long time.

The stock market is up @ 70% from it's '09 lows. That's hardly a 'bounce' dead cat or otherwise. If there is one thing we all should have learned by now is that no two situations are identical. To say that the Great Recession and the Great Depression are one and the same is a mistake. And I say this as someone who failed to buy into the stock market when it was at its lows. I'm not investing in the stock market ever again. I've probably lost money because of it, but I am not comfortable putting my money in the stock market. Let others make their wealth from it, I shall just stand by and watch it go up and down.

dshort's "Four Bad Bears" is good to look at:

This is not the 30s and the PTB aren't going to sit around with a thumb up their bum like the 30s.

Almost to the day boomers began to retire, the market has had less and less easy money to chew up. Easy money, just like SS+Medicare that was just dumped into the latest and greatest thing. I think we're setting the stage for a world-wide dumping of debt, then an IMF-like sovereign bond market.

Nobody is talking about slowing down a rally. If I had been a person to make the trade of my life that day and be told it was recalled I'd be mad.

So what is it called when the Boomers start extracting all their wealth? We need a catchy term for that.

The flipside is that some Boomers will be dying off before collecting much of anything. What will the inheritors do with it?

tarkin says

My only real take away from the show was the government had almost nothing to do with the stock market until after that Thursday in Oct. What the government did after the crash is almost irrelevant, what we really need to understand is how the almost completely unregulated market got there in the first place. Frankly I find it beyond believable they stop early crashes from happening by actually running around on the floor shouting buy orders significantly above the last bid to get everyone exited.

The stock market back in 1929 and today are much different. Back then people were trading on rumors and not on real facts. Many companies who had their shares traded didnt disclose financial statements. So if you bought RCA or Ford, back in 1920s chances you didnt really know how much about earnings (Profit and Loss Statement) or the value of the entity (Balance Sheet) or how much cash it was generating cash (Cash Flow Statement) as is the case today. That all changed with the SEC act of 1933 and 1934, which mandated disclosure for issuing companies.

Would you, if you lived in 1929 blindly go out and buy up RCA for what ever price someone wanted, without knowing what the real value was. Many back than simple saw prices of stock raise without looking at fundementals and value. Sounds like things today with the housing market. Stupid buyers!

It really is amazing how the media never mention this.

Here is an example ... I have some Facebook/Twitter stock and im selling it for $200 and $500 a share Any blind takers out there? You get the picture im sure.

What's the difference between a rumor and a cooked profit report? Performa accounting comes to mind. People weren't the ones buying the stock, but handing cash over to brokers who could order for them. Now people sit at a computer and read the reports written for them about companies that may or may not even exist.

A huge difference then and now is people KNEW they were gambling. Today people think they're doing the responsible thing. I can burn a house to cook my food. Stocks can be worth NOTHING!!

knewbetter says

What’s the difference between a rumor and a cooked profit report? Performa accounting comes to mind. People weren’t the ones buying the stock, but handing cash over to brokers who could order for them. Now people sit at a computer and read the reports written for them about companies that may or may not even exist.
A huge difference then and now is people KNEW they were gambling. Today people think they’re doing the responsible thing. I can burn a house to cook my food. Stocks can be worth NOTHING!!

There is only GAAP accounting that is used and reported on. If Proforma (excluding non cash charges) have any meaning to you then you can look at it if you want. But its meaningless for some like me as is EBITDA.

No! many back then were not resposible when they gambled their money away, as they are today not resposible for overpaying for tech stocks in 1999, and overpaying for their homes. Thats a problem in personal discipline. Do you want the nanny government to hold your hand all the time?

And no public companies today do not cook their books, thats why you have external auditors, and public statement by the auditors, who are accountable to the BOD. And yes, people do get fired, when they dont follow the rules. The process is much more advanced then you give it credit. But i dont expect many to understand that.

Stocks are worth their Net Asset value and future cash flow. Its not that hard to learn and understand. But you can try. You might even learn how to buy on your own without a broker.

E-man says

@ Vicente,
Hey, I guess you got the last laugh on AAPL :o). That Bankster loud mouth guy is a drama queen.

LOL! It's not a profit until I sell it!

Curious to see how TM (Toyota) plays out. Scooped up some during the drop related to all that brake hysteria, and today they announced return to profitability, and just a little reaction not a lot. Suspect this reflects people's doubts about whether recovery is baked in for the "Real Economy".

Well, 70% is a very high bounce. We have a lot more in the market than we did in 1929, a lot more. And we have a lot more to lose too. So what if the dead cat looks as if its suspended in the air between bounces? It's still a dead cat.

simchaland says

Well, 70% is a very high bounce. We have a lot more in the market than we did in 1929, a lot more. And we have a lot more to lose too. So what if the dead cat looks as if its suspended in the air between bounces? It’s still a dead cat.

Only in cartoons.

thomas.wong1986 says

tarkin says

My only real take away from the show was the government had almost nothing to do with the stock market until after that Thursday in Oct. What the government did after the crash is almost irrelevant, what we really need to understand is how the almost completely unregulated market got there in the first place. Frankly I find it beyond believable they stop early crashes from happening by actually running around on the floor shouting buy orders significantly above the last bid to get everyone exited.

The stock market back in 1929 and today are much different. Back then people were trading on rumors and not on real facts. Many companies who had their shares traded didnt disclose financial statements. So if you bought RCA or Ford, back in 1920s chances you didnt really know how much about earnings (Profit and Loss Statement) or the value of the entity (Balance Sheet) or how much cash it was generating cash (Cash Flow Statement) as is the case today. That all changed with the SEC act of 1933 and 1934, which mandated disclosure for issuing companies.
Would you, if you lived in 1929 blindly go out and buy up RCA for what ever price someone wanted, without knowing what the real value was. Many back than simple saw prices of stock raise without looking at fundementals and value. Sounds like things today with the housing market. Stupid buyers!
It really is amazing how the media never mention this.
Here is an example … I have some Facebook/Twitter stock and im selling it for $200 and $500 a share Any blind takers out there? You get the picture im sure.

I can agree with almost all of what you are saying, but I think there is a deeper fundamental to understand about pre-Oct. 1929. The people were not just buying RCA on a whim and the belief that the stock price would rises. Most of the small number of “real” Wall Streeters back then where the “insider traders”, it was not unlawful then. Insider trading was a market fundamental. Brokers would advise their clients based on what the Wall Streeters were doing. These Wall Streeters, all but controlled and regulated the market whether they realized it at the time or not. They would choose when to trade quietly or very publicly. It seems that they would openly admit that they could manipulate the market price or almost any stock and the market respected them for it.

Now back to the pre-Oct. 1929 almost crashes. When these mini-crashes started they were recognized as such and the “Wall Streeters” applied what we would call today “Circuit Breakers”. They would trade very publicly, offer significant over the last bids, and run the whole floor of Wall Street shouting and buying something at every hub/pit. The market watched and responded to what these “insider traders” where doing. At one point the bankers even pulled money to setup a fund to inject capital back into the market pre-Oct. 1929. All these “Circuit Breakers” worked until they failed on Oct. 1929. The breakers finally failed because the market lost faith in the “insider traders” and saw that the debt fuelled system was too deep to be filled in with mountains of cash? I really do not know why, but it is clear “Circuit Breakers” existed, were used, and eventually failed.

Keep in mind all this happen with very little government oversight or regulation.

To mirror today’s market we have not had anything that could be called a “real” crash. Why, because we have “Circuit Breakers” and they are working. Well they had them in 1929 and they worked every time until Oct. Our market is just like pre-Oct. 1929 because we have fully functional “Circuit Breakers”. Only when these breakers fail can we compare our current market to post- Oct. 1929.

This is the fundamental comparison I think we should be looking at when we try to compare the current market to 1929. We have not crashed yet, and maybe (hopefully) our “Circuit Breakers” will never fail us again as they did in Oct., 1929.

Thanks…

Some people here don't understand that lots things have changed since 1929.

We live in a much safe and better world now. There is no need to buy gold, gun and bottled water.

^ well, the Rodney King riots were something of a wakeup call for my generation. Not that I expect roving mobs to take over LA again but the truth is the thin blue line can be easily overwhelmed should conditions deteriorate, like say should a hard-line Teabagger element gain power and they actually walk their talk.

As for gold, if I had $100,000 I wanted to protect from inflation, it's hard to think of another asset class as good as a PM mix.

Perhaps one could go into multifamily housing in an area that's not going to depopulate this century, but there's a lot of big fish in that pond and real estate has its management and maintenance overheads.