Market was down almost a thousand points earlier in record panic.
by James Buchanan
CNBC reports: “Stocks staged one of the most dramatic selloffs in market history Thursday as what may have been a trader error exacerbated losses in a market already jittery about the European debt crisis. The Dow ended down 347.80, or 3.2 percent, at 10,520.32, after being down as much as 998.50 earlier, the Dow’s biggest intraday drop on record. Treasury’s surged. Under current New York Stock Exchange rules, if the market falls ten percent or more between 2:30 and 3:00 pm ET, trading is halted for 30 minutes. At its worst point, the Dow was down between 8 and 9 percent today.” (So they didn’t shut down the floor, but almost.) At the height of the panic, one trader, on the condition of anonymity, said he heard fixed-income desks in Europe shut down early because there was no liquidity — basically European banks are halting lending right now. But in the final 15 minutes of trading it was revealed that a trader at a major firm may have mistyped a trade as billion — instead of million — which made what would’ve been a 300-point selloff more like a 900-point selloff.”
And if you believe this was largely caused by a typo, I’ve got a bridge in Brooklyn, I’d like to sell you. This lame excuse is intended to stop a panic among the ordinary sheeple. The big investors got wind of something that panicked them, and we may never know if it involved a Goldman Sachs investigation or even rumors of war breaking out against Iran.
The speediness of the panic and sell off should be a giant red flag that the confidence in the DOW is truly paper thin. All the major investors have their programs to bail out at the first sign of trouble, and a 1,000 point plunge is a staggering sign that key investors don’t believe the market deserves to be this high.
The article continues “All this fogginess about botched trades came as the market was already on edge about Greece and the European debt crisis. Just before the panic started, which was around 2:30pm ET, Mohamed El-Erian said on CNBC that the Greek crisis is about to spread. ‘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. Rochdale analyst Dick Bove said the riots in Greece, which escalated after the Greek austerity bill was passed, are also a telling sign. ‘There is simply a growing recognition that Greece has got to default,’ said Rochdale banking analyst Dick Bove. ‘The riots in the streets showed the decision to repay the debt was not going to be made by the people in Germany, France and Switzerland, it’s going to be made by people in Greece and they’re not going to repay it,’ he said. ‘Anyone seeing the riots is going to recognize that this government is going to be thrown out and anything replacing this government is going to be far more leftist leaning and they’re going to repudiate.’ ”
The economy of Europe may be pushed over the edge thanks to events in Greece, and the US economy may similarly begin to collapse thanks to events in California. Some pundits have stated that the next big disaster facing America will be the massive debt from large (heavily minority) states like California and New York that will be eventually demanding 100 billion dollar bail outs from the Feds.
California is following in the footsteps of Greece with bankruptcy on the near term horizon. California spends $13.1 billion per year providing services such as public schools and prisons for illegal aliens. Unionized state workers in California got insanely lucrative contracts and retirement programs. Finally the crazy Latino and far left liberals in the California government always do the wrong thing, spend too much and are literally driving businesses out of the state in record numbers with their endless fees and most recently CO2 restrictions, which no other states impose.
The CNBC article adds “April sales reports from major retailers were mostly disappointing, including reports from Costco and Gap. Teen chains reported sales declines that were worst than expected…” Costco is a bargain superstore that should be thriving in bad times. If people don’t have enough money to buy their basic necessities from Costco, we are in truly serious trouble.
All the recent economic news has been horrific. Florida and California just announced record high unemployment. March was the worst month in history for foreclosures. There is no “Obama Recovery”. There is an “Obama Depression” and it’s getting worse.