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Did The SEC Hint At A 7% Market Plunge?

Tyler Durden's picture




 

Back in October 19, 1988, in response to Black Monday from a year earlier (the SEC is not known for fast turnaround times)  a little known SEC rule came into effect, known as Rule 80B, and somewhat better known as "Trading Halts Due to Extraordinary Market Volatility" which set trigger thresholds for market wide circuit breakers - think a wholesale temporary market shutdown. According to Rule 80B (as revised in 1998), the trigger levels for a market-wide trading halt were set at 10%, 20% and 30% of the DJIA. The halt for a 10% decline would be one hour if it occurred before 2 p.m., and for 30 minutes if it occurred between 2 and 2:30, but would not halt trading at all after 2:30. The halt for a 20% decline would be two hours if it occurred before 1 p.m., and between 1 p.m. and 2 p.m. for one hour, and close the market for the rest of the day after 2 p.m. If the market declined by 30%, at any time, trading would be halted for the remainder of the day. Needless to say, a 30% drop in the market in our day and age when the bulk of US wealth is concentrated in the stock market, would be a shot straight to the heart of the entire capitalist system. Which is why the smallest gating threshold is and has always been the key.

However, despite the revision, as anyone who traded stocks on that fateful day in May knows, the market-wide circuit breakers were completely ineffective and unused during the HFT-induced and ETF-facilitated flash crash of May 6, 2010. In turn, the SEC's flash crash response was to implement individual stock-level circuit breakers which however, instead of restoring confidence in the market, have become the butt of daily jokes involving freaked out algos. This was merely the most recent indication of how horribly the SEC's attempts to "regulate" a market it no longer has any grasp or understanding of, backfire on it.

However, even that may pale in comparison to just how badly the SEC may have blundered yesterday afternoon, when it proposed yet another revision to its market-wide halt rule. And once again, instead of making traders and investors more comfortable that the SEC is capable and in control, the questions have already come pouring in: is the SEC preparing for another massive market crash?

This is what hit the tape from the SEC late yesterday:

The Securities and Exchange Commission has approved two proposals submitted by the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) that are designed to address extraordinary volatility in individual securities and the broader U.S. stock market.

 

One initiative establishes a “limit up-limit down” mechanism that prevents trades in individual exchange-listed stocks from occurring outside of a specified price band. When implemented, this new mechanism will replace the existing single-stock circuit breakers that the Commission approved on a pilot basis after the market events of May 6, 2010.

 

The second initiative updates existing market-wide circuit breakers that when triggered, halt trading in all exchange-listed securities throughout the U.S. markets. The existing market-wide circuit breakers were adopted in October 1988 and have been triggered only once, in 1997. The changes lower the percentage-decline threshold for triggering a market-wide trading halt and shorten the amount of time that trading is halted. The exchanges and FINRA will implement these changes by February 4, 2013.

The key word is bolded and underlined: lower. Because as noted above, the upped market-close threshold is irrelevant: should the S&P trade down to 800 on Monday, western civilization will have far bigger problems to worry about than reversing a market crash. It is the tiniest quantized increment that is relevant. Which according to the SEC is now a "mere" 7% to enact a market holiday, either temporary or indefinite.

This is how the market-wide circuit breaker language will look going forward:

  • Reducing the market decline percentage thresholds needed to trigger a circuit breaker to 7, 13, and 20 percent from the prior day’s closing price, rather than declines of 10, 20, or 30 percent.
  • Shortening the duration of trading halts that do not close the market for the day to 15 minutes, from 30, 60, or 120 minutes.
  • Simplifying the structure of the circuit breakers so that there are only two relevant trigger time periods, those that occur before 3:25 p.m. and those that occur on or after 3:25 p.m. The two periods replace the current six-period structure.
  • Using the broader S&P 500 Index, rather than the Dow Jones Industrial Average, as the pricing reference to measure a market decline.
  • Requiring the trigger thresholds to be recalculated daily rather than quarterly.

Additional, the SEC also adopted less relevant single-stock trading halts. Think Italian stock market where financial firms trade either limit up or limit down day after day now for months. Surely that helps restore confidence in the market:

The “limit up-limit down” mechanism, established jointly by the exchanges and FINRA, prevents trades in individual listed equity securities from occurring outside of a specified price band, which would be set at a percentage level above and below the average price of the security over the immediately preceding five-minute period. For more liquid securities — those in the S&P 500 Index, Russell 1000 Index, and certain exchange-traded products — the level will be 5 percent, and for other listed securities the level will be 10 percent. The percentages will be doubled during the opening and closing periods and broader price bands will apply to securities priced $3 per share or less.

 

To accommodate more fundamental price moves, there would be a five-minute trading pause, similar to the pause triggered by the current circuit breakers, if trading is unable to occur within the price band for more than 15 seconds.

 

Under the new plan all trading centers, including exchanges, automated trading venues, and broker-dealers executing trades internally, must establish policies and procedures to prevent trades from occurring outside the applicable price bands, honor any trading pause, and otherwise comply with the procedures set forth in the plan.

In the grand scheme of things, the stock limit mechanisms are irrelevant. They never worked before, and will not work in the future. Perhaps if the SEC really cared about restoring some single-stock level confidence it would consider implementing the stub trade ban which allegedly prevents idiotic executions from taking place, yet which as Nanex shows us on a daily basis, happens all the time with exchanges gaming every possible loophole.

What is relevant, and what is very disturbing, is why did the SEC just lower the band from 10% to 7%: why 7%? And why now? What is even more troubling is that as Bloomberg's Nina Mehta writes, the decision to make these changes was not made by actual traders, not by actual people who understand how broken the market is (such as those who have been banging the table on broken market structure since 2009... we are fairly confident readers know who these entities are), but... wait for it... Nobel prize winning economists!

An advisory committee to the SEC and Commodity Futures Trading Commission recommended changing the marketwide system. The advisers included Joseph Stiglitz, an economist who won the Nobel Prize; David Ruder, a former SEC chairman; Brooksley E. Born, who was chairman of the CFTC; and John J. Brennan, chairman emeritus and senior adviser at Vanguard Group Inc.

And another entity involved, is the exchange which allowed Corzine to make off with billions in client funds, which have, since the November bankruptcy, still not been discovered:

The owner of the Chicago Mercantile Exchange is examining the SEC’s approval of the marketwide circuit breakers, Michael Shore, a spokesman for CME Group Inc. (CME), wrote in an e-mail. The company has circuit breakers for equity-index futures that are consistent with those in the stock market.

 

“CME Group has been a strong advocate for more appropriately calibrated marketwide circuit breaker trigger levels that are coordinated across trading venues,” Shore said. “We have commented extensively on the proposals, are currently evaluating the changes approved by the SEC and will be submitting proposed amendments to our rules in the near future.”

Surely nothing quite like getting an economist and an exchange that stood idly by as billions in client funds vaporized, together in the same room and hatching a brilliant plan to avoid shareholder losses.

The question obviously is: what does the SEC know that nobody else does? And why now, just as everyone is terrified that Europe is on the verge of an all out collapse? And just as importantly, why wait until February 2013? Why not implement now to at least avoid the potential of a total market cataclysm including potentially the game-ending 30% drop in the last hour of trading?

Basically what the SEC just did is make sure everyone has a stop loss order 7% below the prevailing NBBO. And with so little volume in markets, and with the HFT algos having nothing better to do than inflicting max pain on traders by hunting stops, primarily to the short squeeze side, but now courtesy of the SEC, to the downside as well, one can be sure the HFT-induced selling pressure to hit the market-wide "Max Pain" point will suddenly become very topical.

Our advice: have limit sell orders a few percentage points above the 7% threshold that the SEC suddenly is infatuated with. Because once they are crossed, the entire market will light up in one massive stop loss trading activation. It would also be prudent to pair trade this limit order with a limit buy just above the 20% down threshold that DKed orders during flash crash day.

In other words, thanks to the SEC's statement, and to the psychological effect of "framing" so popular to traders, down 7% in milliseconds just became the New Killing It.

We leave readers with the current chart showing the NYSE's own market-wide trading halts. Learn it well.

Allow us to paraphrase the last sentence: "in the event of a 3900-point decline in the DJIA, you better be locked and loaded."

 

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Sat, 06/02/2012 - 14:21 | 2487412 cbxer55
cbxer55's picture

Go with Tyler and one of the Zero Hedge thongs. ;-)

We'll be watching for the modeling photos. ;-0

Sat, 06/02/2012 - 13:05 | 2487322 Global Hunter
Global Hunter's picture

Wouldn't let me edit, Mrs Global Hunter is getting in on the action she says "Daniel Negraneau" from Pokerstars.

Sat, 06/02/2012 - 13:21 | 2487355 slewie the pi-rat
slewie the pi-rat's picture

rilly?

you are lucky bilge rat to have such a hot woman around, G_H

bong-ho!

Sat, 06/02/2012 - 13:27 | 2487374 Global Hunter
Global Hunter's picture

I AM lucky yes for sure

Sat, 06/02/2012 - 13:05 | 2487323 slewie the pi-rat
slewie the pi-rat's picture

L0L!!!  random sharpshooter dept?

clewie the pi-rat clewZ:

#3:  not known for his tats or toons

#4:  dNavarro would probably agree w/ him

Sat, 06/02/2012 - 13:12 | 2487338 Matt
Matt's picture

Doug Noland at PrudentBear.com

disclaimer: using Chrome, highlighted the entire block of text and googled it.

Sat, 06/02/2012 - 16:14 | 2487349 slewie the pi-rat
slewie the pi-rat's picture

yep, but jena gets to try for the prize!

PrudentBear

haven't had time to finish reading it yet, myself! 

where does the time go,ooo.oo...?

Sat, 06/02/2012 - 16:34 | 2487706 Esculent 69
Esculent 69's picture

Dan Norcini

Sat, 06/02/2012 - 20:04 | 2488003 slewie the pi-rat
slewie the pi-rat's picture

no!  but you get a cigar

just e-mail tyler and let him know he should send you one of his best, ok?  all pre-approved, too!  you want the kind with the tobacco, right?

traderDan lit up my afternoon yest from this other weekly round-up which only a moron would not check daily, also: Gold Seeker Weekly Wrap-Up: Gold Gains Over 3% on the Week

he sees QE as per billDudley of the NYFed's criteria;  but QE can mean many things now, can't it? 

seems like just the other day tyler was BiCh-slapping some moron calling himself a zeroHead who didn't get that opTwist was QE

obviously, any cBank whose goobermint cannot raise the money for the deficit without printing is gonna print

but who knows whether the chairsatan thinks the fuking USA can pile more debt uponWeThePeeps without printing?

what fuking difference does it make to the indebted?  we can still use the postOffice?  get arrested?  pay $250K for a broken leg?  have education debt4evah non-default-able? 

[debt = money]  what a country!  USA!USA! 

where the checks are always in the mail and the food stamps never ever fail!

Sat, 06/02/2012 - 12:52 | 2487297 Tinky
Tinky's picture

Derrick Rose?

Sat, 06/02/2012 - 13:35 | 2487394 slewie the pi-rat
slewie the pi-rat's picture

no, but good guess given clewie's clew

unlike so many noobies, i think youRin the right place, here, T_, so i take pleasure in a belated welcome to ya!

Sat, 06/02/2012 - 15:11 | 2487541 Tinky
Tinky's picture

Thanks slewie. You have my current favorite screen name. Also, I have a rather peculiar sense of humor (for future reference)...

Sat, 06/02/2012 - 15:42 | 2487610 slewie the pi-rat
slewie the pi-rat's picture

rilly?  {i was forced to a search based on:  axel's brother?  you can imagine what i found!}

ty, also!  now go knock tyler on his boozed-up publisher's ass!  L0L!!!

Sat, 06/02/2012 - 12:29 | 2487267 EverythingEviL
EverythingEviL's picture

Tyler, I find it a miracle that you and or whoever runs this blog can keep it going because I'm sure there are some very high up people that would love to shut this site down. You guys must have some damn good security...thanks for the awesome work!

Sat, 06/02/2012 - 12:43 | 2487286 unununium
unununium's picture

Evidence that all hope is not lost.  Also, the fact that they still care about manipilating our opinions is rather encouraging.

Sat, 06/02/2012 - 13:51 | 2487416 cbxer55
cbxer55's picture

Its funny, but I work for the US Government, maintaining aircraft. I access this site on work computers all of the time during breaks and lunch. Multiple times a day, logged in to boot.

Its not even blocked on Government computers.

Hows that fer ya? ;-)

Sat, 06/02/2012 - 14:57 | 2487518 Implicit simplicit
Implicit simplicit's picture

Maybe there is hope!

Sat, 06/02/2012 - 15:13 | 2487548 Tinky
Tinky's picture

Perhaps it's an efficient way for *them* to track PM holders...

Sat, 06/02/2012 - 16:59 | 2487752 Cadavre
Cadavre's picture

Especially when we consider the fact that [at least] one of the 377 verbotten terms are in every ZH post (BTW ZH ain't on the list, yet, but "Ice" is). "Ice"? OMG what have we gotten ourselves into . hmmmm ....

Sat, 06/02/2012 - 12:32 | 2487272 sabra1
sabra1's picture

so, if the DOW futures plunge 7% overnight, stops at 6% wouldn't trigger when/if the markets re-open in the morning. cue in the E-Trade baby please!

Sat, 06/02/2012 - 12:34 | 2487274 toady
toady's picture

Free and fair markets as far as the eye can see.

Only an idiot, or someone with inside information, or a large entity with large loopholes, would try this market.

Sat, 06/02/2012 - 14:03 | 2487428 DeadFred
DeadFred's picture

Or someone who likes to watch the fast moving red and green numbers and lines. Perhaps you include that person in your "idiot" category? I still contend that as fast as they are the algos are still stupid computers and can be gamed once you discern their trading patterns. Don't think of it as a market so much as finding the programming quirks in the a computer game. Sell the mithrail sword to Drang and it will appear in his partner's inventory where you can buy it at half the price. Rinse repeat. Tyler does us all a huge favor when he announces those glitches like 'ES is now trading 20 pts above credit'.

Sat, 06/02/2012 - 17:22 | 2487787 Landrew
Landrew's picture

Very true! I have a new system, Delayed arbitrage options on the top 5 dow volume leaders in options. Loving BAC, Ge, Intc, msft and Csco. Wait for the pop buy the puts. I no longer buy the flip as calls die in minutes. Not being able to trade during the day it limits my trading to one trade a day. Any thoughts? I find it makes more than a straddle.

Sat, 06/02/2012 - 12:35 | 2487275 q99x2
q99x2's picture

The economists were probably paid for their expert work. What the hell do they care.

Sat, 06/02/2012 - 13:22 | 2487356 Yes_Questions
Yes_Questions's picture

 

 

Like Prince, during the Warner years.

 

Sat, 06/02/2012 - 12:36 | 2487276 miker
miker's picture

I think the Fed is going to sit tight as the market sells down.  Their plan is to scare Congress into doing something productive towards deficit reduction and the fiscal cliff coming.  The 7% trading halts make sense as this will help prevent a big swoop down (at least for awhile).  Everytime Congressional leaders talk about doing something, they'll buy the market back up some.

Of course, if Congress doesn't get moving, then the Fed will have to do QE3 at some level in the market.  They will NOT let the stock markets drop to levels seen in 09.

Just a theory.

Sat, 06/02/2012 - 13:10 | 2487332 Global Hunter
Global Hunter's picture

I agree the markets in general have priced in a trillion dollar + QE 3 AND 4 in my humble opinion.  The CBs are going to do everything in their power to talk markets up or get the political cover to print print print because they know they've passed the point of diminishing returns.  The only reason things are limping along is because nobody wants to be the person, group, institution or country that gets the blame for crashing everything.  Its a hot potatoe, so to your point they'll pass it the politicians let them make a move and pass it on...

Sat, 06/02/2012 - 13:24 | 2487363 Cash Is King
Cash Is King's picture

GH, you'll know you're right when Cramer gets a "print, print, print" sound effect.

 

Sat, 06/02/2012 - 14:21 | 2487438 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Its foolish to think that "they" have control of the markets.  The fact that the securities industry is colluding with their favorite public relations firm (SEC) to make stupid rules that cannot be enforced is evidence of their desperation.  I mean, so what if the market shuts down?  That won't stop other markets that trade their securities (ie London, Tokyo, Frankfurt, etc...).  It only means that there will be a huge gap down when the markets open the next day.  Control is an illusion.  The government and the FED are experts at deceit.  But they are not in control.

Sat, 06/02/2012 - 12:52 | 2487300 my puppy for prez
my puppy for prez's picture

My official conspiratorial interpretation:

This is simply an "encrypted code tactic"  designed to tip off the big players to "get out NOW"!  Such a "policy" signals the red alert without the future risk of discovered secret emails to insiders, thus providing avoidance of incriminating evidence in a court of law.  The date, OBVIOUSLY too little, too late, makes it obvious to the big fish that ths is merely an encrypted warning, while simultaneously luring less savvy/discerning investors to stay in until January '13.

No insider emails, no evidence, no problem!

Getting the warning message out....mission accomplished!

Sat, 06/02/2012 - 14:08 | 2487433 DeadFred
DeadFred's picture

You may be right. We may see an honest DOJ before the seven year statute of limitation passes. Probably not.

Sat, 06/02/2012 - 12:53 | 2487302 scatterbrains
scatterbrains's picture

So are they planning to knock the market down 7% lock all the bears into there positions then announce a 2 trillion print fest while the markets are temporarily closed and in so doing killing the last few remaining bears left in the world with any capital?

 

Sat, 06/02/2012 - 15:03 | 2487528 Dr. Kananga
Dr. Kananga's picture

Speaking of locked positions--according to another ZH post, JPM is in a pickle with their London prop desk, pardon me--ahem, *hedge* desk trades. Apparently they cannot unwind without getting ripped to shreds by the other sharks that are circling, waiting for a twitch.

This is well beyond my grasp, but maybe someone here might have a educated opinion--how would a 7% down cap assist--if at all--JPM in their unwind? No relationship? some relationship?

I'm watching and waiting too--no skin in the game, just interested in seeing some good old-fashioned Roman entertainment.

Sat, 06/02/2012 - 15:55 | 2487637 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Kill all the bears or bulls & U have no market.

Sat, 06/02/2012 - 12:54 | 2487304 XitSam
XitSam's picture

So how many times in the past would the new rules have triggered stops?

Sat, 06/02/2012 - 12:54 | 2487305 valkir
valkir's picture

If DOW plunges 7 % monday morning ,go to your nearest bank branch.There will be free towel with Bernanke halp rip face on the towel.

Sat, 06/02/2012 - 12:54 | 2487307 PontifexMaximus
PontifexMaximus's picture

Gary Gensler and Blythe Master will be the top advisors.

Sat, 06/02/2012 - 13:09 | 2487315 pissing_excellence
pissing_excellence's picture

zh creates dialogue, wrong or right, far fetched or not, just put it out there and others can decide for themselves.  It applies to them great, if not...thats great too. And if it creates something impartial or helpful for patience or action then even better. 

Like a brainstorming session, throw a bunch of ingredients together and see what happens, bubbling cauldron of ideas, you judge. 

No one can even say Shark jumping, this whole last decade was a disappointing Jumping the shark ballet on ice with no skates around.

Dont like the program change the station theres no gun to your head.

 

 

 

Sat, 06/02/2012 - 13:11 | 2487334 Jacque Itch
Sat, 06/02/2012 - 13:40 | 2487403 azzhatter
azzhatter's picture

that british woman should have bitch slapped krugman so he wet his depends

Sat, 06/02/2012 - 16:52 | 2487740 Lucius Corneliu...
Lucius Cornelius Sulla's picture

What I'd take Krugman and his cronie G men to task on is the morality of passing private bondholder losses on to the public which is essentially what the Keynesian strategy is doing.  It should be the pension funds that held bank bonds from banks that should have been nationalized and held in receivership and pensioners who UNDERPAID into the funds with unrealistic assumptions about returns that need to be punished.  The union cronies and political hacks knew that they were gaming pensions with their lies.  Now they must pay.  Not the taxpayer.  Krugman is the number one shill for the biggest mafia in the world.

 

Sat, 06/02/2012 - 18:17 | 2487866 bnbdnb
bnbdnb's picture

Krugman is right. Austerity will make things worse. The problem is, spending and creating more debt will temporarily kick the can down the road, and possibly even balance things out in the long run (if you return to fiscal conservatism, which is highly unlikely). However, our political system is setup in such a way that kicking the can down the road serves the politicians best interest. It never serves a politicians best interest to stop the flow of easy money. Its a miracle we have anyone in congress who understands this.

You can continue to do this for many decades, right until society is looking for a hero, and we have our next Hitler.

Sat, 06/02/2012 - 13:12 | 2487337 Tom Green Swedish
Tom Green Swedish's picture

No, be greedy when others are fearful.  QE3 market manipulation is in the works. The bankers are pumping (which owns the FED).

Sat, 06/02/2012 - 13:14 | 2487346 Cash Is King
Cash Is King's picture

Might the circuit breaker changes be in conjunction with an assumed extension to both the tax cuts and the debt ceiling raise? 3-6 month extensions based off a Nov. election imply Feb or Mar is the 3rd and final strike (extension) for these 2 issues and when the shtt really hits the fan. JM2C

Sat, 06/02/2012 - 13:25 | 2487365 piliage
piliage's picture

"The advisers included Joseph Stiglitz, an economist who won the Nobel Prize"

Stiglitz? Gosh, what possibly could go wrong?

http://www.youtube.com/watch?v=E4MAifsp-8E

 

Sat, 06/02/2012 - 14:57 | 2487521 Clycntct
Clycntct's picture

Great clip. Thanks.

Hugh puts the smack down on em.

Sat, 06/02/2012 - 13:28 | 2487377 Snakeeyes
Snakeeyes's picture

We have made virtually no progress in the last two years in employment. Europe is melting, China is slowing. This is NOT sustainable!!

Since July 2010 (recovery summer I), the number of people going on disability was 170,000 GREATER than the decline in unemployment!!!!!

http://confoundedinterest.wordpress.com/2012/06/02/recovery-summer-scorecard-170000-more-on-disability-than-decline-in-unemployment-a-disabled-recovery/

This the all the progress that wsa made for an additional $2+ trillion in Federal debt?

This is insanity and we WILL hit a brick wall!

Sat, 06/02/2012 - 15:26 | 2487576 lakecity55
lakecity55's picture

We will all live in a soviet gulag with O'Blow Me wearing some kind of flashy military uniform.

Sat, 06/02/2012 - 16:51 | 2487739 lotsoffun
lotsoffun's picture

hah. hah.  his wife has a big butt.  hope and change somebody gets to enjoy it.

Sat, 06/02/2012 - 13:28 | 2487378 JackT
JackT's picture

Why jump in increments that let the frog jump when you can slowly boil it.

Sat, 06/02/2012 - 13:33 | 2487388 Mary Wilbur
Mary Wilbur's picture

May I ask a stupid question? Why hasn't HFT been banned? It seems to me that a lot of trading problems would be at least improved if the beast were banished.

Sat, 06/02/2012 - 13:47 | 2487409 boiltherich
boiltherich's picture

Mary W. I will take a stab at that; because only the big boys can afford the supercomputing power behind HFT and the algos that operate on them, and it is one huge source of income for them, you either allow them to HFT and frontrun or you bail them out, politically it is better for the politicians to let them trade in ways the general public is utterly unaware of than to hand out more hundreds of billions in taxpayer funds.  Which is also why there have not been any high profile insider trading cases brought to justice since Martha Stewart got nailed.

 

P.S.   There are no stupid questions from newbies, though trolls do ask some pretty stupid shit in an attempt to promote their bigotry and fascism, watch out for them.

Sat, 06/02/2012 - 16:11 | 2487666 oldman
oldman's picture

boil,

you are a really smart dude                 om

Sat, 06/02/2012 - 16:16 | 2487679 Dr. Kananga
Dr. Kananga's picture

"There are no stupid questions from newbies"

+1

Great place to ask questions and learn things. I took years of Econ in college, and imagine my surprise when I found out how little Econ theory matches market reality--I'm a neophyte again.

Sat, 06/02/2012 - 20:41 | 2488048 Hulk
Hulk's picture

You would have thought that after the Martha Stewart arrest, all the Big Boys would have straightened up and flied right, but NOOOOO....

Sat, 06/02/2012 - 13:48 | 2487414 Atomizer
Atomizer's picture

Without HFT, no market would exist. They're banking on Basel III accord to build confidence in luring new dumb fuck retail investors at the end of this year.

 

Our new slot machines have a 49% return rate, come on in and reap the awards of untapped riches.

Sat, 06/02/2012 - 18:56 | 2487922 Umh
Umh's picture

Computers are doing so many things today. I don't have any problems with computers trading as long as when they do it wrong their owners have to eat the losses. Since they have already proven that "bad" trades will be canceled instead of being eaten they should forbid computers from trading.

Sat, 06/02/2012 - 19:28 | 2487959 Ranger4564
Ranger4564's picture

M W, who would do the banning when the entire political system is a subsidiary of the banking system?  Besides, when the only criteria is increased profits, why entangle the situation with ethics?  The parasites will always cling to those with the best chances for success.  Not many people in history sided with the smaller army / weaker opponent.  Same here...

Sat, 06/02/2012 - 13:41 | 2487406 boiltherich
boiltherich's picture

Yeah!  Only a little more interference with the capitalist system, circuit breakers only work to give the PPT time to step in when real investors step out in droves.  But, I don't give a damn because A) I do not now and never will again own equity of any type and B) in the overall picture of manipulated markets, fraudulent accounting, and vast unreported inflation this is so minor as to not be worthy of the time it took to read it.

Sat, 06/02/2012 - 13:58 | 2487425 Atomizer
Atomizer's picture

 

Definition of 'Crony Capitalism'

A description of capitalist society as being based on the close relationships between businessmen and the state. Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the ruling government in the form of tax breaks, government grants and other incentives.

 

Why not ask your US Marxist President a question. Who is going to pay for all the failed D.O.E solar company loans/grants?

Sat, 06/02/2012 - 14:49 | 2487508 Vince Clortho
Vince Clortho's picture

The CBs sure raped the golden goose this time, eh?

Sat, 06/02/2012 - 13:48 | 2487415 boiltherich
boiltherich's picture

If they were serious about preventing high magnitude plunges they would ban short selling and increase margin requirements. 

Sat, 06/02/2012 - 14:16 | 2487449 Atomizer
Atomizer's picture

 

 

Boiltherich, I just got off the phone will someone. You have a great idea. We just don't think we can give you a performance raise this year. Sorry, someone else has already come up with your idea. Please continue dropping your patch of ideas into the suggestion box near the water cooler.

SEC bans short-selling - Last Updated: September 19, 2008: 7:41 AM EDT

Agency puts temporary halt to trading practice that 'threatens investors and capital markets' for 799 financial companies

Sat, 06/02/2012 - 15:28 | 2487574 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

How dare people make money from prices going down!  Prices should only go up.  Inflation forever until no 1 can afford anything!

 

Sat, 06/02/2012 - 16:18 | 2487668 boiltherich
boiltherich's picture

Righto, that is the point, no free markets, no honest accounting, and they will eventually just make it illegal to sell forget short sell, they will call it capital controls or some god awful acronym nobody can remember. I used to believe that fundamental analysis of companies was the way to price stocks, that technical analysis had limited utility and that was mostly for people who trade without concern for stock prices, for them it is not what is a stock worth but how much can it be bought/sold for and when.

Fundamental analysis is now worse than useless because in order to do anything like analyze a company you have to have honest reporting on the cash flows, balance sheets, and several other metrics that just are no longer available. SEC requires they file forms but the authenticity of those forms is suspect, the accounting houses that audit the books will rubber stamp the paperwork for a fee without looking into the validity of the accounting, and even the cleanest most upright companies still have assets and liabilities marked-to-unicorn breath.

Inflation will go up till nobody can afford anything as you say, this A.M. I stopped at McD's for a sausage biscuit mini meal but when I ordered the guy said that will be $2.39. I said what? What happened to $1.99? He said they went up on their menu last week by 15%. I said OH did you? Well I have not had a raise in years so enjoy your breakfast because I do not want it. I will be back when I get a 15% raise. Meaning never of course, by the way, that is the only thing I have ordered there in years.

I gave notice on my apartment for July 1, I have been here for 15 months, that is 15 months ago I did an exhaustive search of the region and ended up here. Now I am searching again and what I have found is that rents in those 15 months have increased by nothing less than 20%, and about 40% since 2009. Worse than that is that there are almost no decent rentals to pick from at any price. There are plenty of shitholes for what an upscale apartment used to cost a couple years ago, that is substandard places that nobody wants, so yes there are a supply of those, and there are quite a few high end houses nobody can afford, but the big fat middle market is full. I am starting to think that unless I get really lucky in the next week or so I am going to have to start looking to a region of the country that never had a housing bubble.

All the places that had a bubble it popped and people for years lived rent free in their houses since there were foreclosure suits that resulted in a moratorium. Now the states settled those suits and banks are kicking out hundreds of people per month here in this region and they have simply absorbed all available rentals. With hundreds more each month. As sure as night follows day the rent increase will keep coming till enough people move away to stabilize the market, and eventually some new multifamily will get built, but I can't afford it here now, what will it be like next year? I paid $700 for a 2 bed 2 bath with garage in 2007, the same place is now over $1,000. Next year it will be 1300.

And gas, wholesale gas has dropped 72 cents per gallon from the March 26 peak, in that same time retail unleaded here has risen 75 cents. Of course the biggest distributor in these parts is a fundamentalist christian republican who thinks he should be able to charge what he likes and who knows high gas prices are bad for the current democratic regime. I am a non violent person, but I hope someone with less restraint does that guy a favor and sends him to his heavenly father.

Yesterday felt really "collapsy" to me, how about you?

Sat, 06/02/2012 - 17:58 | 2487837 Non Passaran
Non Passaran's picture

.

Sun, 06/03/2012 - 00:00 | 2488438 Clashfan
Clashfan's picture

Banning naked short selling may not be a bad idea.

 

Sun, 06/03/2012 - 15:55 | 2489684 boiltherich
boiltherich's picture

I was being sarcastic I hope you all know.

Sat, 06/02/2012 - 13:52 | 2487417 oldman
oldman's picture

It appears that the US markets will be emptier than ever if not closed.

Why would anyone trade in these markets when the trades can be made in other countries?

This makes really easy to manage the market with a single 'Hal'---or maybe the US is preparing to allow ONLY algo-trading between the five money center banks and the Fed so that there is no possibility of anyone losing, and not realizing that 'no-loss' is the same as 'no-win': a true zero-sum game.

I'm amazed by what these dudes can dream up----and if you are an option trader----GOOD LUCK!!

Life in Tooneville is great, is it not?

I have to stop here--I'm laughing so hard as the significance of this hits----------om

Sat, 06/02/2012 - 14:09 | 2487434 sansnobel
sansnobel's picture

Like I said before...What market?  There is no market.  Only government diktat commrades!!!  Trust me our wise and all powerfull overlords have your best intrest at heart!!!  Isn't a command economy spectacular!!!!!!?

Sat, 06/02/2012 - 15:23 | 2487569 lakecity55
lakecity55's picture

Slowly, every night, The O'Bummer adds one more marxist cog to the machine he is building.....

Sat, 06/02/2012 - 14:12 | 2487439 LawsofPhysics
LawsofPhysics's picture

Selling is no longer allowed, problem solved.  Morons.  At this point, the reset can not come soon enough.  Know the real value of your labor and who you can trust?  Time to find out, fucking bring it.

Sat, 06/02/2012 - 14:14 | 2487444 Centurion9.41
Centurion9.41's picture

Tyler, step back from the dark side of the MSM marketing vortex...

How can one so consistently credit the SEC with the pervasive ignorance you so well document, hold the thought that this time "it's different"?  Such thermobaric Cognitive Dissonance is visible by even the most simple minded Sheeple.

I have two theories:

1 - the SEC minions ran some basic curve fitting stats and out popped something on the order of 7%.  Which was rounded to 7; from experience they know anything marketed with a decimal assertion of precision is immediately seen as a lie whereas Sheeple readily swallow a "best practices" SWAG.

2 - which my gut tells me is far more likely, was merely what arose from a highly placed SEC minion's @ss when he was "hot-tubbing" with a libation during a government team building conference.

Seriously, your prodigious knowledge, connections and talents demand we ask you to focus your limited time on more pressing and gravely more important machinations of the cabal.

Kind regards,

Centurion

Sat, 06/02/2012 - 15:55 | 2487638 oldman
oldman's picture

Centurian,

Maybe you might want to re-think your theories, in fact you might want to re-think your thinking.

This is almost as detrimental to any public participation in these markets as was allowing nano-cent trades.

These increment are obviously to low to facilitate any kind of momentum or flow and destroy the idea of having markets with bid and ask as their essence

I'll stop here---i'm bored                          om

Sat, 06/02/2012 - 14:17 | 2487451 bugs_
bugs_'s picture

this is troubling but at the same time we should remember that it is impossible for the SEC to actually be prepared for what will happen.  right?

can they halt trading everywhere?

if the SEC is truely worried about a 7% decline....thats....uh....whats the word i'm looking for.....bullish?

Sat, 06/02/2012 - 15:20 | 2487561 calltoaccount
calltoaccount's picture

SEC = Seriously Enables Crime

Sat, 06/02/2012 - 19:04 | 2487929 Umh
Umh's picture

Maybe they just believe that things are going to get very volatile. Maybe they have inside information that things are going to get volatile. Maybe they are just busy bodies trying to impress someone with the great job they are doing. Hahahahahaha.

Sat, 06/02/2012 - 14:26 | 2487466 ivana
ivana's picture

for God's sake!

Still no algos for controlled lowering of indexes?!

WTF are they doing at those universities and institutes?

Sat, 06/02/2012 - 14:29 | 2487472 RoadKill
RoadKill's picture

LAME!  a 7% drop in the market isn't a crash!  Even -10% isn't a true CRASH - unless it happens in a matter of minutes.  You should only stop the market from trading because something is broken, not because people are reevaluating their Hopium addiction and stock valuations.

Sat, 06/02/2012 - 14:38 | 2487482 razorthin
razorthin's picture

Why bother with limit orders?  The exchages will just cancel your trades.  NEVER shall YOU profit from their incompetence!

Sat, 06/02/2012 - 14:53 | 2487514 Atomizer
Atomizer's picture

Nooooooooooooo. Market orders are the best, because your forcing your order. You had better run with the HFT computer order group or just keep your limit order ass planted on the porch. What a bunch of limp wristed trading pussies we have today. Shakes my head.

/sarc

Sat, 06/02/2012 - 14:42 | 2487498 goldinpenguin
goldinpenguin's picture

As the Fed spokesman said a couple years ago "we want high asset prices". The government and quasi-governmental institutions like the financial exchanges are more interested in high asset prices - either financial assets like stocks and bonds or real assets like homes than they are in fair markets. Where would the recovery be without the feel good effect of high stock prices ginned up by the Fed free money for the money center banksters.

Sat, 06/02/2012 - 15:15 | 2487553 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Heh.  We'd be in a real recovery because all the dumbasses that made bad bets on housing & stocks would've lost, clearing the system of the debt.

Sat, 06/02/2012 - 16:03 | 2487656 Monkeyfister
Monkeyfister's picture

+1

I'd bump more if I could!

Sat, 06/02/2012 - 14:44 | 2487499 Offthebeach
Offthebeach's picture

No KY, no spit, just a big sandy fist of Hopium right up to the elbow. ( Oh, try to smile will you? Makes it a bit easier on the next Muppet in line. Thank you, The Management. )

Sat, 06/02/2012 - 14:49 | 2487509 Implicit simplicit
Implicit simplicit's picture

7%, 10% whatever. Some algo will approximate when it will happen with a 98% probability 3 days prior  by calculating the length of the lever arm of the 770 t worth of ephereal derivatives  that has become arrived from derived, and is now a levered weight that will drop the market 7% through forced selling to meet margins.

Sat, 06/02/2012 - 15:03 | 2487529 Gift Whores
Gift Whores's picture

People that are still in the non physcical market do not read ZH.

Sat, 06/02/2012 - 15:06 | 2487534 d2themfi
d2themfi's picture

The most perplexing thing about this to me by a lot is the choice of February 2013.

Sat, 06/02/2012 - 15:12 | 2487543 geewhiz190
geewhiz190's picture

ZH is probably the most interesting website I've come across.  Some very timely pieces and generally worthwhile for the most part. TD take a look at "Energy Future Holdings" as a potential problem for the junk market.  Could be a big issue shortly.

Sat, 06/02/2012 - 15:13 | 2487547 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

What a crock of shit.  In capitalist market, there should be NO stops, circuit breakers, or any nonsense getting in the way of price discovery.   This is a centrally planned stock market = guaranteed to fail just like the Soviet Union & all centrally planned garbage.

I love how everyone's a capitalist until they lose money.  Since when was making money guaranteed?  With the present US governement, certain entities like JP Morgan & Goldman Sucks, even with government backing, these morons still manage to lose billions.

A homeless guy with no education could run this country better than that asshole Obomber.  How? Do nothing & let people, especially the rich, fend for themselves in a real capitalist system of NO guarantees except what's in the Constitution.

Anything else = system collapse.

Sat, 06/02/2012 - 15:28 | 2487577 HamFistedIdiot
HamFistedIdiot's picture

" In capitalist market, there should be NO stops, circuit breakers, or any nonsense getting in the way of price discovery. " Excellent. Let the stock market fail. No "prudent" investor should be in there now anyway. 

 

I would have expected another major false flag attack by now to distract us from the economic collapse. What's wrong, traitorous filth? Too many people onto ya?

Sat, 06/02/2012 - 15:35 | 2487595 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Correct.  Let it fail.  If it was real it wouldn't fail because the stocks would be part-ownership in real, money-making enterprises.  Who trusts the financials of companies after all the screwing around with accounting rules, allowing companies to mark assets however they want?

Sat, 06/02/2012 - 16:03 | 2487657 Esculent 69
Esculent 69's picture

That false flag distraction will come on Wednesday June 6, 2012 and would probably have something to do with Syria or Iran. Who cares about the market when we have the "responsibility to protect" which leads us into a new war which drives the market up (even if it is a fixed and fraudulant market).

If you know anything about Communists/ Marxists is that they love to strike on relevant dates.  What is so significant about June 6?  D-Day.  And what better way to stick it to the capitalists then to hit us where it hurts.  Especially when Tuesdays elections will turn out every status quo politician who wants more government. This will give them a crystal ball into the up coming Presidential elections and it will force Obamas hands to act to save his Presidency.

Sat, 06/02/2012 - 17:27 | 2487799 Non Passaran
Non Passaran's picture

What a bunch of B.S.

Sat, 06/02/2012 - 18:30 | 2487886 Esculent 69
Esculent 69's picture

If so then why did Obuttfukk go to Osawatme, Kansas on Dec 7 2011 to make a speech about how the idea of rugged individualism and free markets has never worked.  What is Dec 7? Pearl Harbor Day.  Obuttfukks campaign theme is forward which is a well used socialist/communist message.  He lauched his campaign of May 1, which is May Day.  If my prediction comes true i won't be happy about it.  It will just confirm everything i know about marxists/ the Preezy of the United Steeezy  If anyone thinks Obuttfukk is trying to help the market place or capitalism in general has been believing of Maxi Fisher or MDB.  Politics and markets are all related and the Globalists are trying to take away everyones freedom via their central banks which basically takes away sovereignty of nations.  This is the goal of Marxists.  No towns, or nations or borders.  

Some saying about i care not who the ruler of the country is.  Let me control the money and yada yada yada. 

Sun, 06/03/2012 - 00:05 | 2488445 Clashfan
Clashfan's picture

Do you mean "Communists/Marxists" or occultists? Not that there's a huge difference per se, but occultists would be a bit more accurate and fit more precisely with what you're saying about numerology.

Sat, 06/02/2012 - 15:15 | 2487552 yogibear
yogibear's picture

The only positions the SEC is concerned about is sexual.  The SEC should change it's abbreviation from SEC to PEC. The Porn Evaluation Commission. Their a joke! Once in a while they go after some small-time flunky and give the blatant billion dollar criminals  a free pass.

Sat, 06/02/2012 - 15:20 | 2487564 Nobody For President
Nobody For President's picture

I really do appreciate these little clues as to how to stay solvent trading in a broken market. Thanks again, Tyler. Hope I can digest this by Monday.

Sat, 06/02/2012 - 22:19 | 2488235 CloseToTheEdge
CloseToTheEdge's picture

keep it simple:

make 1:45 your new beer thirty

Sun, 06/03/2012 - 02:33 | 2488609 Nobody For President
Nobody For President's picture

Sounds about right...

Sat, 06/02/2012 - 15:31 | 2487580 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Everyone remember this from the last time the market crashed? They'll be even more desperate to save their counterfeit paper money system this time!

 

SEC bans short-selling Agency puts temporary halt to trading practice that 'threatens investors and capital markets' for 799 financial companies. By David Goldman, CNNMoney.com staff writer Last Updated: September 19, 2008: 7:41 AM EDT

NEW YORK (CNNMoney.com) -- The U.S. Securities and Exchange Commission took what it called "emergency action" Friday and temporarily banned investors from short-selling 799 financial companies.

The temporary ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately.

"This will absolutely make a difference," said Peter Cardillo, chief market economists at Avalon Partners. "Short sellers are going to have to cover their positions very heavily."

Short sellers borrow stock with the aim of selling it, then buy it back at a lower price, hoping to pocket the difference. The commission said short sellers add liquidity to the markets during normal conditions, but recent unbridled short-selling has contributed to the recent tailspin in the stock market.

"The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," said SEC Chairman Christopher Cox in a statement. "The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets."

Cox said the action "would not be necessary in a well-functioning market," and is just one of many actions being taken by the government to jump-start the embattled financial markets.

The SEC also said it would temporarily ease restrictions on companies' ability to repurchase their stock, and force money managers to report their short positions in certain stocks that are not included in the 799 banned companies.

Some market observers have also blamed short sellers for the punishing declines in bank stock prices over the past few days. Critics of short sellers have argued that some had been spreading rumors about a company while "shorting" the stock in order to drive the price lower.

"In the marketplace, we need both sides of the equation," Cardillo said. "But the relaxed regulation of the SEC has led to abuses of short selling that have destroyed many, many companies."

As panic began to permeate the financial markets, many investors took short positions on already battered financial companies regardless of the news that came out of the companies or the government. For instance, investment banks Morgan Stanley (MSFortune 500) and Goldman Sachs (GSFortune 500) reported better-than-expected earnings Wednesday, but dropped significantly in trading.

"This decision will squeeze the shorts," Cardillo added. "Now, if there is any good news, shorts will have to cover."

The ruling comes after the SEC decided Wednesday to ban the practice of so-called "naked" short-selling, in which investors short the stock without actually borrowing it.

On Thursday, Britain's Financial Services Authority also temporarily banned short-selling for financial companies. The SEC said it is consulting the FSA in the matter. 

First Published: September 19, 2008: 6:12 AM EDT

 

Sat, 06/02/2012 - 15:37 | 2487592 Atomizer
Atomizer's picture

WB7, been thinking about how our bearded Federal Reserve Santa Claus is going to reveal his master plans to save the world. Snickers

Not refined, raw lyrics. Build a photo or make a video. Soon this will become funny & sad in the same instance.  Only our Santa Claus policy maker will look weaker in demostrating 'emergengy plans'. Winks.

You better watch out

You better not cry

Better not pout

I'm telling you why

Ben Shalom Bernanke is coming to town

He's making a list

And checking it twice;

Gonna find out who's holding the Dice

Ben Shalom Bernanke is coming to town

He sees you when you're saving

He knows when you're buying  “tradition”

He knows if you've been not consuming, from Chinese brotherly right

So be good for goodness sake!

O! You better watch out!

You better not cry

Better not pout

I'm telling you why

Ben Shalom Bernanke is coming to town

Ben Shalom Bernanke is coming to town

Sat, 06/02/2012 - 15:34 | 2487594 denis84
denis84's picture

"Back in October 19, 1988, in response to Black Monday from a year earlier [...] a little known SEC rule came into effect, known as Rule 80B"

ahh yes, and 24 years later the 4th biggest economy on this planet,i.e.germany, is adopting that rule in a desperate attempt to appear of doing something about the financial markets.

the way it was presented here was that something needed to be done about that HFT.

useless and ineffective regulation..the market participants know it´s useless, the politicians in power know it, the people know it..

wtf is going on

Sat, 06/02/2012 - 15:47 | 2487617 deerhunter
deerhunter's picture

anyone who bought UPL on the toronto exchange at 1.87 canadian before it reached Nasdaq made a killing and still would be.

Sat, 06/02/2012 - 15:50 | 2487623 the grateful un...
the grateful unemployed's picture

the logical reason for trimming the 10% drop to 7% is to keep nominal losses from hitting the headlines. down 10% when the market was 1000 was only a 100 points, at 10000 its a 1000 points, and the public tends to see things nominally. (which is why the Fed is happy to run inflation ahead of equivalent bond yields by as much as a 33% because both numbers are still low, say 3% CPI to 2% on the 10Y) 

in the end they don't want to have to cancel any more trades. which begs the question, when the margin calls start, and the instititions CAN'T sell to raise cash, what's the outcome? i say the SEC might save the day, and lose everything else. and if the major firms are insolvent then no one is there to buy stocks at any price. (unless of course it gives Ben time to sway new Tbonds for the firms bad paper, and get the thing going again)

Sat, 06/02/2012 - 15:52 | 2487629 Arnold Ziffel
Arnold Ziffel's picture

The PhD's know. Remember the PhD Dean of MIT predicting 100% chance Japans rise to world dominance crushing USA with their smarts in his book, "Head to Head?"

That fancy PhD was 100% wrong.

How about the famous (and flashy) Paul Ehrlich who predicted with certainty the end of mankind due to starvation in his, "The Population Bomb?"

That PhD was also 100% wrong.

...and the list goes on. The book, "Future Babble" has a whole list of these 100% predictions by PhD's that were 100% wrong.

The more certain a PhD is, the more certian he is wrong. I prefer to listen to "the man on the street" with real life experience and read articles here on ZH to help balance out the BS I get from MSM.

Good luck!

 

 

Sat, 06/02/2012 - 15:52 | 2487633 Convolved Man
Convolved Man's picture

Betting Games:

Framing Profits and Losses

 

"what i win?", The Jerk

http://www.youtube.com/watch?v=aUQkbXWwJhQ

 

Sat, 06/02/2012 - 16:11 | 2487644 Monkeyfister
Monkeyfister's picture

Well-- It won't be a "crash," as in "zOMG!!! Nobody could have predicted!"

It will be a proper CORRECTION fueled by Karma's revenge.

These Bankster bastards have had too much fun stuffing their pockets with illicit gains; artificially inflating every Commodity, Equity and product for faaaar too long on the backs of the Middle and Working Classes. They managed to outprice demand for everything for everyone except them-- have made everyone else suffer, and now, it is time for them to pay the price for their brutal foolishness.

Karma is buffing up her Doc Marten's ready to give the lot of them the swift Boot To The Head that they so richly deserve.

Let me know when those fuckers start jumping from the windows of their lofty corner offices.

Sat, 06/02/2012 - 16:04 | 2487660 devo
devo's picture

I can feel it coming in the air tonight, oh Lord
And I've been waiting for this moment for all my life, oh Lord
Can you feel it coming in the air tonight, oh Lord, oh Lord

Sat, 06/02/2012 - 18:37 | 2487661 unununium
unununium's picture

7%/day == 9.55 day half-life

You will lose no more than half your money every 9 days in the S&P.  Commence rejoicing.

Sat, 06/02/2012 - 16:13 | 2487672 insanelysane
insanelysane's picture

Apparently we aren't at the bottom if the MAN is changing the rules.

So stop the market for 15 minutes while the banksters put their trades up front, trade em, stop for 15 minutes, bankster trades moved to front, trade, rinse and repeat.

Sat, 06/02/2012 - 17:23 | 2487793 optimator
optimator's picture

I've seen rule after rule tilt the playing field in favor of the big guy at the expense of the little guy.  HFT thousands of times a second good for the big guy, but limit the little guy to three trades a week for example.

Sat, 06/02/2012 - 16:16 | 2487678 ebworthen
ebworthen's picture

The robots will be out in the twinkling of an eye, before the stops can even be implemented.

Retail investors and houses will be caught with their pants down.

"Lining up for a roll call

Goin' out with a big bang

Gettin' caught in a shootout

Take it hard like a big man..."

http://www.youtube.com/watch?v=15dO6BfAKFA

Sat, 06/02/2012 - 16:28 | 2487697 TradingTroll
TradingTroll's picture

And this is supposed to attract retail back to the market?

 

The government IS the stock market. So if you want to know what happens in a collapse, where you are reliant on govenrment, Katrina and GOM oil spill are great benchmarks.

 

There is simply no need to have any of one's wealth in the stock market with all the alternatives out there.

 

I prefer private Limited Partnerships with great yield (and far less compliance than public companies), physical assets like gold, silver, art, pre-Fukushima canned food (Mountain House etc), canned tuna, wine, whiskey and sake, also royalties (from oil and gas to software) and land banks.

Sat, 06/02/2012 - 16:28 | 2487696 I am Jobe
I am Jobe's picture

Merkel Rejects Debt Sharing as Obama Urges End to Crisis Cloud

http://www.bloomberg.com/news/2012-06-02/merkel-rejects-debt-sharing-as-...

I guess the Germans said go fuck with yourself. Timmy should go and perform hari kari and take his fam with him too.

 

Sat, 06/02/2012 - 22:32 | 2488277 LongOfTooth
LongOfTooth's picture

Well, if the Germans won't do it the fed will.  Grab your ankles American tax payers, here comes the big one.

 

Sat, 06/02/2012 - 22:46 | 2488299 WmMcK
WmMcK's picture

Fick mich, du
miserabler hurensohn
Streck ihn aus
Streck aus deinen
heissen gelockten

- Zappa

Sometimes I think I could just listen to him and Carlin continuously
(except to drop in here, of course).

Sun, 06/03/2012 - 00:10 | 2488449 Clashfan
Clashfan's picture

Zappa fans should really read an online book called Inside the LC by Dave McGowan.

Sat, 06/02/2012 - 16:47 | 2487732 Ted Baker
Ted Baker's picture

NEXT WEEK IT IS EXPECTED THAT THE SP5 AND DOW WILL CRASH DOWN TO 10%+ EACH....STAY AWAY FROM EQUITY MARKETS FOR A WHILE. ONLY LOAD GOLD TO YOUR HOLDINGS IF YOU CAN...

Sat, 06/02/2012 - 19:46 | 2487985 Sockeye
Sockeye's picture

Excellent precision in your forecast there mr baker.

Sat, 06/02/2012 - 16:49 | 2487736 oldman
Sat, 06/02/2012 - 16:51 | 2487737 Negro Primero
Negro Primero's picture

...and now Silvio 'Bunga-Bunga' is back:

"We have to go to Europe and say forcefully that the ECB should start printing money. If it doesn't, we should have the strength to say 'ciao, ciao' and leave the euro."

But a little later he denies it: "It was a joke, I heard on the radio" hohoho...

http://www.reuters.com/article/2012/06/02/us-berlusconi-euro-idUSBRE8510...

Sat, 06/02/2012 - 17:05 | 2487758 orangegeek
orangegeek's picture

A bear market is a process, not an event.  Having breakers may halt panic, but a trend is a trend.

 

And by the looks of the SP500 weekly - through the eyes of elliott wave, we are headed down.

 

http://bullandbearmash.com/index/sp-500/weekly/

Sat, 06/02/2012 - 20:39 | 2488042 PoliticalRefuge...
PoliticalRefugeefromCalif.'s picture

Seems to me they are merely trying to orchestrate a nice soft crash, buying time to unwind their own indescretions.

When's the last time meaningful regulation was crafted to protect muppets anyway? 

Sat, 06/02/2012 - 17:29 | 2487792 junkyardjack
junkyardjack's picture

PR SPIN!: Looks like JPM will be going to the bailout troughs soon, they returned $600M of MF funds they took earlier.  They know they will need a lot more than that in a little while.  Shit must be getting crazy there  

 

http://www.nypost.com/p/news/business/jpmorgan_returns_it_had_in_mf_global_wZZG0SIjIXqMsP5onmGBHL

Sat, 06/02/2012 - 18:03 | 2487849 j0nx
j0nx's picture

7% not what I call a massive market crash. It's already dropped at least 7% in the past month alone...

Sat, 06/02/2012 - 18:08 | 2487857 midgetrannyporn
midgetrannyporn's picture

The manipulation will continue until confidence is restored. It will be fun watching buffett squirm if the s&p tanks just as his options come due. :popcorn:

Sat, 06/02/2012 - 18:28 | 2487884 AmenRa
AmenRa's picture

HFTs can be programmed to stop at 6.99% before 3:25PM. Just sayin'

Sat, 06/02/2012 - 19:27 | 2487956 Youri Carma
Youri Carma's picture

Who watches the stockmarket/robots playing with each other anyways?

For me it's an indicator of nothingness. Maybe it's only use is to see if QE is in play or not.

Sat, 06/02/2012 - 20:19 | 2488021 knowshitsurelock
knowshitsurelock's picture

The time to count chairs was before the music stopped.

Sat, 06/02/2012 - 20:39 | 2488044 bluemaster
bluemaster's picture

cool down just standard manipulation of futures expire on 14 june on price when never been ...

Going Long forward contract  ..

 

 

 

Sat, 06/02/2012 - 21:12 | 2488069 newengland
newengland's picture

Play safe: gold, silver, land, community.

Once upon a time, there was capitalism which marked to market, and open cry of traders.

Now, there is central planning, unregulated otc derivatives...corporatists rule and ruin all.

The good news: the Rockefeller/Rothschild merger because it means that they will want to spare the U.S. from the worst excesses of their horrible ways, their eugenics and freak Trilateral Commission of 'technocrats'.

The bad news: the Rockefeller/Rothschild merger because they think the NDAA gifts them the U.S.A.

Prepare to defend yourself. Darth Vader said to Luke Skywalker: I am your father.

That's the kind of mind game that the new world order like to play as its media and entertainment business propagandists hide in plain sight.

Since 2007, the USD has lost double digit purchasing power while gold has risen, true purchasing power.

Walk the yellow brick road in silver slippers. We're not in Kansas anymore, Dorothy, tinman, lion, scarecrow and munchkins.

The 'Wizard of Oz' was a strident political allegory. Traders: defend yourselves: the industry, the land, the commerce. You need to be the Lion, courage.

Sat, 06/02/2012 - 22:26 | 2488255 WmMcK
WmMcK's picture

Munchkins, meet muppets.

Sat, 06/02/2012 - 22:24 | 2488250 SmoothCoolSmoke
SmoothCoolSmoke's picture

7% drop and stop?  As a bear I say bring it on and I'll takes my chances with my SPY puts.  Better that than a 7% pop.

Wed, 06/06/2012 - 23:17 | 2502090 MeelionDollerBogus
MeelionDollerBogus's picture

SPY put's not bad, used it myself, but FAS put or VXX call may also be worth a look. Cross-comparing theta, expected linear-scale moves in the same time-frame and correlated (positive,negative) factored activity on a scatterplot and I tend to fall to vxx call to benefit from the market down-side. Not sure if you'd feel happier with FAS put and FAS call to the market upside.

Sat, 06/02/2012 - 23:17 | 2488373 lolmao500
lolmao500's picture

My favorite video ever...

May 6th 2010 Stock Market Crash - YouTube

http://www.youtube.com/watch?v=1mC4tu1NhUA

Too bad it didn't go to 0... where it belongs.

Sun, 06/03/2012 - 10:45 | 2488973 pismo10
pismo10's picture

If the SEC thinks there is a crash coming, then the bottom is probably in or near.

Sat, 06/16/2012 - 21:51 | 2532985 ebworthen
ebworthen's picture

C'mon 77% market collapse...c'mon baby...c'mon...

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