MUST HEAR: Panic And Loathing From The S&P 500 Pits

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Fri, 05/07/2010 - 05:40 | 336546 qp
qp's picture

 larger keyboards???

Fri, 05/07/2010 - 05:59 | 336557 M.B. Drapier
M.B. Drapier's picture

Special trading wands?

Fri, 05/07/2010 - 07:49 | 336648 WaterWings
WaterWings's picture

It was Wall Street holding up a sign: "KILL THE BILL"


Fri, 05/07/2010 - 10:40 | 336812 4shzl
4shzl's picture

Yup. Which means Uncle Sam has an "agency problem." Unlike the Japanese, whose price-keeping operation was faithfully executed by its broker/banker sock-puppets, the Treasury's primary dealers have "gone rogue" on their masters. Bad, bad, bad. My solution: make the Marine Corps a PD. "Marines follow orders, or people die." Semper fi, baby -- you better believe it.

Tue, 05/17/2011 - 01:54 | 1282102 Karston1234
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Thank you for the support and keep the articles coming!
online phd degrees
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doctoral degree

Fri, 05/07/2010 - 10:35 | 336808 dumpster
dumpster's picture

Plunk your Magic Twanger, Froggy".

Fri, 05/07/2010 - 13:54 | 336983 Strider52
Strider52's picture

I am now net long on WTF and Physical gold. I am short. Really, I'm only 5'10".

Fri, 05/07/2010 - 14:32 | 337015 TaggartGalt
TaggartGalt's picture

Wider bandwidth!

ZH is drowning!

Fri, 05/07/2010 - 05:42 | 336547 floydian slip
floydian slip's picture

sounds like an auction at a horse race

what signal does having the dow bounce like a superball and then say a fat finger did it mean?

DOW 36,000  here we come!


Thats what!


Whots uh the deal?

The gold its in the...





Fri, 05/07/2010 - 08:48 | 336707 B9K9
B9K9's picture

Look, we're all adults here. It's fun to snark about DOW 36,000, but the reality is that the only possible way out of the ponzi trap is to keep it going. For that to happen, it's critical for the public sector to increasingly assume responsibility for credit demand, even if it has to take over 100% of the market.

And guess what? The Keynesiens who got us into this mess even have a theoretical justification. No, not for the underlying credit-money system itself, but intellectual support for government's resistance to private sector de-leveraging: Functional Finance.

You see, in their world, debts are assets & interest is income. Since government controls currency, there's no limit to how many "assets" they can create by incurring debt. Pretty sweet rationale, no?

So yes, look for DOW 36,000. Also gold $36,000 and so on down the line for anything priced in $USD.

Fri, 05/07/2010 - 14:36 | 337023 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

"the only possible way out of the ponzi trap is to keep it going."

I must differ. If you believe the above sentence, then you are really saying is that we need to keep drafting more suckers into the game so that you may cash yourself out ahead.

Or, worse, you're one of those traders who prefers a "double up and throw up" methadology when you find yourself in a bad trade. Either way, it ends up in tears.

Sat, 05/08/2010 - 16:55 | 338297 crosey
crosey's picture

I don't think there are any more suckers around, to tap.  But, your brief holds up mathematically, and on paper, so long as supply remains.  However, at some point, it ends.  I think the end is near, because someone or something will simply "pull the plug".  Quick, easy, awesome to watch.  But sure as hell better than the incremental drowning we have now.

If the DOW does make it to 36,000, I think that volatility will be nearly unendurable....risk-on, risk-off inter and intra-day swings of biblical proportions.  As the game grinds on (assuming there is liquidity), there will be tens-hundreds-thousands-millions of broken pieces of the ponzi machine scattered over thousands of square miles.

Fri, 05/07/2010 - 05:54 | 336554 Graphite
Graphite's picture

This is why "liquidity" is such a bitch ... it's never there when you need it.

Safety, bitches!

Fri, 05/07/2010 - 05:56 | 336555 maff
maff's picture

Somebody who knows how to play with video really ought to splice this recording as a soundtrack to the greek riots and post it here.



Fri, 05/07/2010 - 06:00 | 336558 i.knoknot
i.knoknot's picture

that's radical. almost didn't listen to it. wow.

a seasoned vet and he was clearly blown away.

Fri, 05/07/2010 - 06:06 | 336559 SlowLoris
SlowLoris's picture

No news today about Europe dying? Oh yeah, that was yesterday's hype.



Fri, 05/07/2010 - 06:03 | 336560 whacked
whacked's picture

JPM buy side bid the market up ...

Fri, 05/07/2010 - 06:16 | 336563 Cognitive Dissonance
Cognitive Dissonance's picture

You can hear the absolute incredulity in his voice as this plays off. Particularly at the beginning, when you hear him announcing the incoming wave of paper for sale. "Here they come to sell them again."

"We made it within a handle of limit offer here guys" @ 4:50 sounds veryinteresting. So the intense pressure petered off just before limit down? Then there was one final wave that took it to what seemed limit down (69 @ 5:50) before it started back up.

Then just as crazy, it ramps up with just bids, no offers (6:28) "no offers in the pit here" followed by the exclamation "Tell them we made it down to 1060" @ 7:08 and then "86 even bid and 95 even offer, we're 10 handles wide" @ 7:19 which is just insane. The rising pressure was more intense then the selling.

Fat finger my ass. This was a panic and I would suggest it was engineered.

Fri, 05/07/2010 - 06:18 | 336574 koaj
koaj's picture

and someone at the PPT pushed "Nuclear Buy" yesterday at about 2:53pm est

Fri, 05/07/2010 - 07:51 | 336655 Dr. No
Dr. No's picture

do you think Obama has a big "Buy Buy Buy" button in his oval office right beside the red button to nuke Russia? Or perhaps the nuke button has been rewired since it is no longer needed in his nuke free world.

Fri, 05/07/2010 - 08:03 | 336669 Joe Sixpack
Joe Sixpack's picture

You called?

Fri, 05/07/2010 - 06:22 | 336577 plongka10
plongka10's picture

Now that's what I call entertainment.

Fri, 05/07/2010 - 07:57 | 336652 WaterWings
WaterWings's picture

I wish that finger had hit "T" instead of "B".

Yo Creamer, which hand had the fat finger? Right hand is blaming left hand - which one do we chop off?

What do the keys immediately around "M" do anyway?

Fri, 05/07/2010 - 07:55 | 336659 LeBalance
LeBalance's picture

and having studied our 07 and 29 history we are not going to put our heads up our asses. Based on *admitted* scams of yesteryear, this *was* engineered.  That is the prevailing status quo, not a *fat middle finger.*

Fri, 05/07/2010 - 09:20 | 336751 tj3
tj3's picture


Mon, 05/10/2010 - 03:46 | 340652 Miles Kendig
Miles Kendig's picture

The way you chose to fictionally examine the topic was well worth the effort.  And you're so right about the pressure of the reflate.  I have never heard both the bid and offer totally evaporate one right after the other, especially with that kind of order flow.  Amazing.

Fri, 05/07/2010 - 06:15 | 336566 justbuygold
justbuygold's picture

That may be what happened in the pits , but there was definitely an aglo gone wild that caused that large basket of stocks to absolutely crater over the one to 2 minutes.   Now that all those trades are being cancelled you can be sure that it was to save a certain firm from possibly bankruptcy due to the error.  You can also bet it was one of the big boy firms such as GS, JPM, Blackrock, or C that was the big loser , and therefore that put heavy pressure on exchange officials to get those cancels.

Fri, 05/07/2010 - 06:15 | 336567 Gordon_Gekko
Gordon_Gekko's picture

The TURD that the US Stock market is, God knows it DESERVES to crash. Yesterday's crash was one of the happiest moments of my life. HALLELUJAH!

In other news, DOW 36000 - here we come!

Fri, 05/07/2010 - 06:16 | 336570 koaj
koaj's picture

that was world ending type shit yesterday. no fucking way it was fat finger. it was real week before hand

i miss the s&p pits. used to listen to them all the time


i traded through asian fin crisis, ltcm,, 9/11...was nothing compared to yesterday

Fri, 05/07/2010 - 06:17 | 336571 QuantTrader
QuantTrader's picture

The market crash was so yesterday.  Time for ZH to move one.  One day of glory is over.

European voting in favor of bailout.  Back to our regularly scheduled programming.  Dow 12,000 here we come.  Futures soaring.

Fri, 05/07/2010 - 07:47 | 336647 Headbanger
Headbanger's picture

Welcome back Harry.

Fri, 05/07/2010 - 10:05 | 336780 TaggartGalt
TaggartGalt's picture

Hope you are still long and strong, ass wipe.

Fri, 05/07/2010 - 06:19 | 336575 The Axe
The Axe's picture

The money they must have made fading that bullshit.....

Fri, 05/07/2010 - 07:56 | 336662 Hansel
Hansel's picture

Of the guys I know:

2 made over $500,000

1 made $300,000

2 made over $100,000

and a whole bunch made over $25,000

Sure, they all "earned" it by adding so much "value" to society.  What a scam.

Fri, 05/07/2010 - 09:24 | 336752 Reductio ad Absurdum
Reductio ad Absurdum's picture

The speed at which the stock market operates nowadays has turned it into a scam/casino. The purpose of the market is to raise capital for business ventures; this doesn't need to occur at high speed. We might be better off if all transactions were forced to take one year minimum to complete. Such rules might force people to become investors again.

Fri, 05/07/2010 - 10:13 | 336786 DaveyJones
DaveyJones's picture

You hit it on the head. The traders matter more than the economy and with that comes each one's destruction.

Fri, 05/07/2010 - 10:41 | 336816 Marley
Marley's picture

I know of few good charities you and your buddies can donate those ill gotten gains too.

Fri, 05/07/2010 - 10:57 | 336827 Hansel
Hansel's picture

I was demoted to punk ass chump last year.  I'm out of the market.

Fri, 05/07/2010 - 12:58 | 336914 Marley
Marley's picture

Sorry, my bad.  Misread the 1 for an I.

Fri, 05/07/2010 - 06:24 | 336580 -1Delta
-1Delta's picture

fat finger my ass

Sat, 04/23/2011 - 00:43 | 1198437 Daen
Daen's picture

One of the most noteworthy posts yet.  Awesome! Regards, bladder infection symptoms

Fri, 05/07/2010 - 06:25 | 336582 QuantTrader
QuantTrader's picture

why does he talk about 1000 Dow points down at the very beginning?  There is something missed at the front as to why he brought that up?  Was he talking about limit down when dow was off 300-400 points?

Fri, 05/07/2010 - 08:53 | 336714 jedwards
jedwards's picture

I was curious about that to.  I think he's talking about the circuit breakers on the Dow which would have gone off after 10% down.


Imagine the pandemonium that would have occurred if the markets hit limit down?  Someone must have been defending the limit down on behalf of the PPT.

Fri, 05/07/2010 - 09:04 | 336732 choob
choob's picture

Yea he was talking about limit down prices in dow and ES, a little after he mentions 'we still have 60 handles of room'. Pandemonium wouldn't have ensude if the market hit limit down...that's what it's there for - everything would have calmed down and it would have been back to 'normal'. If you listen to the clip you can hear the big buyers coming in near the limit price.

Fri, 05/07/2010 - 06:26 | 336585 Greater Fool
Greater Fool's picture

Excellent audio--thanks again, ZH.

Yes, it does seem a little suggestive that support suddenly materialized before it was about to go limit-down.

Fri, 05/07/2010 - 12:17 | 336877 GoinFawr
GoinFawr's picture

'Limit-down' was 20% that time of day. 10% limit is earlier.

Which, to me, reeks even more.



Fri, 05/07/2010 - 06:28 | 336587 Mentaliusanything
Mentaliusanything's picture

I never read the above - I am still (1hour later) still shaking from the words of a trader leaving work on the NYSE and I quote

" The machines have taken over"


I screw with you not - such truth on the Worlds TV should never be assumed to be Flippant. 

Fri, 05/07/2010 - 06:54 | 336603 Cognitive Dissonance
Cognitive Dissonance's picture

I find it fascinating that no matter how good the computers are, during a storm with an angine out, the flying public demands a human pilot at the controls. Because there is no way of knowing when this will happen, the human pilot is in the cockpit at all times. Yet there is nothing wrong with taking the humans out of the loop when it comes to trading $Billions (that's B, not M) of dollars of stock in seconds? 

When I studied for my Series 6 twenty five years ago, the book repeatedly told me that the human market makers were there to act with reason and forethought to prevent panics from getting out of hand and to make the right and legally binding choice between making a buck and making a liquid market.

Looks like the almighty dollar displaced reason and forethought. And the humans.

Fri, 05/07/2010 - 08:01 | 336666 WaterWings
WaterWings's picture

A keyboard has turned into a weapon of mass destruction! Better sleep with your shoes on like MsC down in the TN floods. Never know what you'll wake up to.

Fri, 05/07/2010 - 06:34 | 336592 QuantTrader
QuantTrader's picture

The fucked up thing I was long the May 120 SPY puts going into yesterday.  When Dow was off about 900 I tried to sell and 1) IB wasnt taking orders and 2) the bid on the options was 6 and the offer was 12.  Whoever was making a market in those was RAPING anyone not focused and using market orders.  How does the CBOE allow that kind of spread?  So they would let you buy puts at 12 but they'd let you sell them at 6.  Total fail and rape of the retail investor. 


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