Dow Drops 100 points a second this afternoon

[NickHedge]

NOTE: The original title of this post said 1000 points a second which was a typing error. It was supposed to be 100 points a second.

How far does the market have to fall before everything comes crashing down? This is a subject that doesn't ever seem to be addressed directly. I wonder why?

So here is what the MSM is saying about the plunge the market took this afternoon upon fears of economic collapse in Europe.

Stocks Plunge, Then Recover As Debt Worries Slam Markets
Published: Thursday, 6 May 2010 | 3:18 PM ET

In one of the most dizzying half-hours in stock market history, the Dow plunged nearly 1,000 points on worries about the spreading European debt crisis before paring those losses in an equally rapid rebound.

The apparent trigger for the massive sell-off, which began shortly after 2 pm ET, was the approval of austerity measures by the Greek Parliament, which triggered more rioting in Athens.

"There is simply a growing recognition that Greece has got to default," banking analyst Dick Bove told CNBC.com. "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."

There also is a growing sense that any collapse of Greece could trigger a wave of defaults across Europe and even the world.

"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," El-Erian, CEO of the world's biggest bond fund, told CNBC shortly before the sell-off began.

The euro fell further against the dollar, hitting a new 14-month low. The euro has tumbled against the dollar since last fall as faith in Europe's shared currency dwindles. Greece's debt crunch is widely seen as a test of Europe's ability to restore fiscal discipline to the weak economies in its union and keep the decade-old currency viable.

"It's going to drop further," Tim Speiss, chairman of the personal wealth advisers practice at Eisner LLP in New York, said of the euro.

The dollar's rise pushed commodities prices lower, especially oil. That sent prices of oil companies like Exxon/Mobil [XOM 63.00 -3.17 (-4.79%)] and Chevron [CVX 76.21 -3.98 (-4.96%)] lower.

Greece passed a bill in its Parliament after heated debate that calls for unpopular cuts in public spending in pensions and other areas, as well as tax increases. Greece needed to approve the austerity measures to be eligible to receive a $141.9 billion aid package from the International Monetary Fund and the 15 other countries that use the euro.

Greece needs access to an initial portion of the money by May 19 to cover $11.6 billion in debt payments, or it likely will default.

Even if Greece gets the money, there are still worries that the loans would be only a temporary fix to a growing debt problem across the continent. Portugal and Spain have also seen their debt ratings downgraded.

In economic news, the Labor Department said new claims for jobless benefits fell lass than expected last week. It also said productivity rose more than forecast in the first quarter, but that was due in part to a drop in labor costs, which is a negative signal for consumer spending. The report comes a day ahead of the government's April jobs report. It is widely seen as the most important economic report.

Treasury prices rose, pushing interest rates down in the bond market. The yield on the benchmark 10-year Treasury note fell to 3.41 percent from 3.54 percent late Wednesday.

—AP contributed to this report
© 2010 CNBC

Link: http://www.cnbc.com/id/36998463

*****

Somehow Gold seems to be up over $1200 an ounce. Amazing how that works. The US Dollar is going up and is currently above $84. Oil is dropping below $75 a barrel.

The games that are being played. I wonder how many people ate bullets and jumped out of windows this afternoon?

[Deathaniel]

wonder though also how many knew of the impending dip and cleaned uplarge selling high and buying back low...!!!

stock r for suckers it's a voluntary sodomy, even land was f%&^'ed with so now only skills have any value. My advice either way if you have extra cash don't put it in to any banker/ stock tripe, invest in you! Go get a skill you can use to survive from an accredited teaching place invest in you!!!

or start stocking up on goodies like solar/ wind devices, water treatment devices, and canned goods as food will rise drastically in price VERY soon 1-3 months.

we may not have the actual INSIDE of those who made out like bandits today, but if one is smart and well read they can see around thecurve a bit and prepare.

personally if IMf gets even one default, this will lead to them restricting credit and those like USA who are very deep in the background will stop aiding those who default, this will allow say mother Russia to re collect her satalites, or other countries having unfortunate accidents of the benificial to the NWO agenda, see island and poland as examples of those who don't cooperate.


and cutting pensions... damn! they payed into it as they worked there life away and now cause the country owes an international body they're the first on the chopping block? Sad really sad! why not legalize something and become the new cheaper warmer Amsterdam? if they need to make more money. the answer is rarely social service cutting or tax cutting to economical issues, but to analyze what is costing and not giving, and fix it. in Greece, unfortunately that would lead to the massive waste in all govs with there private agenda's from bunker building to secret weapons projects.

beyond that if we're any example if you stopped handing out welfare beyond 6mth and had them repairing roads rather then paying some lazy SOB $18/hr to turn a stop sign, just in internal budgeting, or having 10 cops in one altercation of an old lady pulled off, or having cons get free food... i mean there r lots of other places to cut then pensions and with out defaulting so they can keep the show of being a team world player!

note $18/hr guy only takes home bout 12$ after taxes of that, yes employed but not motivated, how often do you drive by construction crews relaxing or standing around a tool? so if were not paying then they can slack, but if we are then a time table should be used so if the job takes longer it's not out of our pockets over cost on budgets is a common problem.

[Nokturnal]

From yahoo news: "There were reports that the sudden drop was caused by a trader who mistyped an order to sell a large block of stock. The drop in that stock's price was enough to trigger "sell" orders across the market."

[NickHedge]

Yeah, I'm sure that was exactly what happened....in fantasy land.

[h3rm35]

I simply had to edit this post when I found this on Zerohedge... want to hear what it sounded like in the pits of the S&P while this was happening? Yeah, you do - trust me, this is fun!

Quote:MUST HEAR: Panic And Loathing From The S&P 500 Pits
Tyler Durden's picture
Submitted by Tyler Durden on 05/07/2010 04:24 -0500

* Meltdown



"Guys this is probably the craziest I have seen it down here ever." Here it is, memorialized for the generations and away from the now openly ridiculous disinformation propaganda of the mainstream media, just what a full market meltdown panic sounds like: straight from the epicenter, the S&P 500 pits. Luckily open ouctry still exists, if at least for shock value. Click here for a first hand account of the most shocking 15 minutes in recent market history. Fat finger my ass.

8 Theories For Why The Stock Market Plunged Almost 1000 Points In A Matter Of Minutes On May 6th

now, on to the more boring post...

May 7, 2010

in Analysis, Economy, International, U.S.

By Michael T. Snyder

(The Intelligence Daily) — In one of the most dizzying half-hours in stock market history, the Dow plunged nearly 1,000 points on Thursday, May 6th before bouncing back to close down 347.80 points. This represented the biggest intraday decline since 1987. But what made this crash so absolutely shocking is that it happened in the course of less than an hour. Between 2 p.m. and 3 p.m. the Dow lost over 700 points before dramatically bouncing back about 600 points. Two of the 30 stocks in the Dow, Procter & Gamble and 3M, plunged more than 30% in just 15 minutes. Accenture went from trading at around 40 dollars a share all the way down to one cent before bouncing back. Traders and investors were left completely stunned and wondering what in the world had just happened.

So what did happen?

The following are some of the most common theories being put forward to explain what happened….

#1) A Bad Trade

It has been widely suggested that a “fat finger trade” was responsible for triggering the panic. According to CNBC, “sources” have told that network that a trader (possibly at Citigroup) entered a “b” for billion instead of an “m” for million in a trade involving Procter & Gamble.

However, Citigroup has already announced that it has found “no evidence” that it was involved in any erroneous trades. In fact, a statement was released in which Citigroup spokesman Stephen Cohen said this….

“At this point, we have no evidence that Citi was involved in any erroneous transaction.”

#2) A Computer Glitch

New York Stock Exchange spokesman Rich Adamonis says that “there were a number of erroneous trades” on May 6th, and that these could have been caused by computer error.

And the truth is that trading in the financial markets is more automated and more reliant on computers than it ever has been before. Trading literally moves at lightning speed now, and a number of analysts are warning that the pace of the market is so fast at this point that it is really easy for things to spin out of control very quickly.

But if this was really primarily caused by a “computer glitch”, how are investors supposed to have any confidence at all in the market? After all, if a computer error can wipe out half your account in less than an hour, why invest at all?

#3) Cascading Stop Losses

Once the market hits certain technical levels, it is going to automatically start triggering stop loss orders. Once those stop loss orders are triggered, it will push the market down further thus triggering more stop loss orders.

While there have been some protections implemented to guard against this kind of thing, the reality is that it does still happen.

#4) Hackers

Hackers have become more sophisticated and more cunning than ever before. In fact, the bigger a target is, the more enjoyment most hackers get out of taking them down. Is it a possible that someone could have hacked in to the New York Stock Exchange?

#5) Cyberterrorism

Rogue nations and terrorist organizations have been developing their “cyber warfare” capabilities for some time now. We have been repeatedly warned that someday we will see an “Internet 9/11″. Could this stock market plunge be a preview of that?

#6) Fear Of The European Debt Crisis Spreading

There are mounting concerns in the financial markets about Greece’s financial condition and that the European debt crisis could spread around the globe.

In fact, the Dow has lost 631 points, or more than 5%, in just the last three days amidst worries about the situation in Greece. This represents the biggest three day drop since March 2009.

#7) Stop Hunting

Anyone who has spent much time in the Forex market knows what this is all about. The truth is that some of the big financial sharks in the marketplace seem to really enjoy blowing out stop losses.

So could have this have been a situation where a stop loss hunting expedition spun wildly out of control?

#8) A Real Panic

There is also the possibility that this was a real financial panic. There are huge concerns about what is going on in Europe and the currency markets are fluctuating wildly. The Dow was already down several hundred points even before the massive plunge took place. The reality is that there is a lot of fear in the financial markets right now.

But if it was a real panic, then why did the Dow bounce back so quickly? Well, it is the job of the ”plunge protection team” to keep the stock market from declining too rapidly. So did the “plunge protection team” swing into action today? Well, the truth is that we will probably never know because the general public is not supposed to know when they intervene.

In any event, the next couple of days should hopefully make all of this a lot clearer. The trading during the afternoon of May 6th at the big firms will be gone over with a fine-toothed comb, and the exchanges will be closely analyzing their systems for any glitches.

It has already been announced that some of the most erroneous trades will be cancelled. The Nasdaq and NYSE’s ARCA trading unit have both said that they will cancel trades executed between 2:40 p.m. and 3 p.m. on May 6th where a stock price rose or fell more than 60 percent from the last trade in that security at 2:40 p.m.

But this episode shows just how vulnerable our financial markets really are. After witnessing what we saw today, it is going to be really hard to have confidence in the system.

In fact, even if this was just one “bad trade” or a “simple computer glitch”, the reality is that this episode is going to inject even more fear into a marketplace that is already filled with tension.

When fear grips a market things can go south very, very quickly. The truth is that markets tend to fall more quickly than they rise, and if a wave of panic starts sweeping over the financial markets we could see things get quite messy in the coming days.

[ToddTraf]

Holy crap I kept listening for the "score"
Sounded like a good game on the radio

[h3rm35]

Financial Manipulation and Inside Information: Did the Stock Market Drop Or Was It Pushed?
How Can We Find The Truth about Tanking Markets?

By Danny Schechter

Global Research, May 8, 2010

The Wall Street Journal headline on the day after we almost lost the market reported that the wise men on the Street were “baffled” by the big drop Thursday. The Financial Times called the event “Shambolic” as if only a shaman can decode it.



A week after CNBC assured its high net worth viewers that Greece would no longer be a problem, there was an uprising there followed by a volcanic market cliff dive that the White House, NASDQ and every regulator is now investigating.



There is still a lot of head scratching, as if to say, how come our casino went batty? It all happened in a couple of minutes, the time it took for that fail-safe state of the a top of the line, secure, and unsinkable oil platform to sink.



The whole world of finance couldn’t believe what was happening before its eyes and so quickly.



2:38 PM: Dow down 360


2:48 PM: Dow down 600


2:51 PM: Dow down 900


Help.! We still don’t know how the plunge was arrested. I am sure the Treasury Department’s Plunge Protection Team and the Fed and every Central Bank in the world hit their red buttons to pump more money in before the balloon popped.



You are not going to believe it but no one really knows what happened yet. Should we blame a trader who made a typo or were there others playing a shadier and covert game of market manipulation which may soon officially be listed as a psychiatric condition?


Floyd Norris in the New York Times just about suggested the market was an insane asylum. Just read his lead paragraph and realize we are being dominated by financial maniacs with rationality is out the window.


“Combine:

One part nervous traders

One part Greek crisis and

One part trader error.

Stir in one part central bank complacency.

Bring to boil.

Panic.”



“That combination,” he ‘explained,’ “produced one of the wildest days ever in financial markets.”



On display were the usual twin towers of market self-abuse: Greed and Fear.



Angela Merkel, Germany’s chancellor, likened the wider crisis to “a battle of the politicians against the markets” and attacked the role played by credit rating agencies. She declared: “The speculators are our adversaries” suggesting there is a financial war underway that no one in the media seemed to get. Financial analyst Max Keyser sees an outbreak of “financial terrorism.”


The website Gaming the Market all but argues that this market drop was a calculated maneuver which may be why it’s being investigated. I am not financially savvy enough to understand all of the evidence but for those of you are, here’s part of what they say, including the idea of a “holy crap” moment, writing:

“These moves typically occur after 2:30pm Eastern while the market is near a new low or breaking point, with a relatively high VIX. Another characteristic is a large NYSE Adv/Decl negative ratio. One that is negative 10:1 going into lunchtime typically assures a weak close. Ratios of 3:1 negative aren’t what you want. They are easier to manipulate by weak bulls. You want a big scary ratio. It is these negative internals that can clue you into the probability of a PPT push. A big push on a big negative internal is the tell. To instantaneously swing the market around on these days takes a massive amount of concerted capital.


If you watched the market every day last year you know what this looks like. Using 5min candles on your favorite index you will see an immediate and massive full body candle, sometimes eclipsing the entire day’s range in minutes. There is no mistaking this move. It’s a wide-eyed holy crap moment! After this massive push the market will typically close near the high of the day.”


Again, I am not sure how accurate this is but I do know that the truth in the world of finance is elusive, and, yes “baffling. “In many ways, money making is more an art as a science.” I wrote that two years ago in my book PLUNDER: Investigating Our Economic Calamity reporting on the meltdown in 2007. It was published a week before Lehman collapsed.

Despite all the rules that govern the markets or regulations designed to assure transparency and accountability, crooks, swindlers, and even gangsters are commonplace. Corrupt practices are pervasive; regulation is not even as lightening fast computers now do the heavy lifting. When professionals in the field were asked how they define criminal conduct, the majority surveyed said crimes only occur when you are caught.



Clearly some of our “market makers” know what they are doing. There is also extensive posturing in the industry to mask the often-fuzzy line between risk and uncertainty. In many instances, major decisions are made on the basis of fragmentary knowledge, even ignorance, despite professions of careful reviews and “due diligence.” Even “sophisticated investors, can be bamboozled, as we saw in the unmaking of Goldman Sachs and Bernie Madoff.



The Financial Times cites a supposedly knowlegible market economist at Lehman who said: “We are in a minefield. No one knows where the mines are planted and we are just trying to stumble through it.” Another market participant put it this way: “It is not the corpses at the surface that are scary, it is the unknown corpses below the surface that may pop up unexpectedly.”



This sounds like a horror move



I was talking about this after the last collapse. “Many of the “experts” whom I read or see on TV seem clueless, full of hot air. Many of their predictions turn out wrong even when they seem so self-assured and well informed in making them. Jim Hightower warns against believing them, writing: “Don’t be deterred by the finance industry’s jargon (which is intended to numb your brain and keep regular folks from even trying to figure out what’s going on).”



How does one make sense of what is going on? You have to burrow in the business pages and read articles from the bottom up because the most revealing facts are often buried. You have to break dependence on mainstream media and check out specialized websites, blogs, and alternative sources.



After the NY Stock market took a 340-point drop in 2007, only to quickly recover, I went to the business pages of the New York Times. I figured that they would explain it. But THEY DIDN’T KNOW the reason for it either, reporting “emotion and psychology, not financial fundamentals were mostly at work.” They quoted the chief US equity strategist for Citibank: “I don’t think anybody can make sense of it.”



Part of the problem here is that the traders and brokers have come up with all sorts of highly esoteric and complex financial instruments – ways of securitizing debt and raising capital – that outsiders, even experienced financial journalists, have a hard time understanding, much less explaining. Ditto for regulators (and the laws they theoretically enforce), who are hard pressed to keep up with the pace of change. Market traditionalists are also lost.” It seems deliberate.



The scammers are winning.



Two years later after we have read so much about what went wrong, after months of wrangling over financial reforms that Wall Street is beating back like the demand to audit the Fed or break up the big banks, we are back in a big inexplicable mess with a swamp of contradictory information like Friday’s news that more jobs were created while unemployment went UP.



Wall Street has gone short on the American people. Their pump and dump games have to controlled or its not just whether there will be a massive depression, but when?



News Dissector Danny Schechter directed Plunder The Crime Of Our Time (Plunderthecrimeofourtime.com) and a companion book The Crime of Our Time on the financial crisis as a crime story. Comments to dissector@mediachannel.org
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Stock Market Collapse: More Goldman Market Rigging

By Ellen Brown

Global Research, May 8, 2010
Web of Debt

Last week, Goldman Sachs was on the congressional hot seat, grilled for fraud in its sale of complicated financial products called “synthetic CDOs.” This week the heat was off, as all eyes turned to the attack of the shorts on Greek sovereign debt and the dire threat of a sovereign Greek default. By Thursday, Goldman’s fraud had slipped from the headlines and Congress had been cowed into throwing in the towel on its campaign to break up the too-big-to-fail banks. On Friday, Goldman was in settlement talks with the SEC.



Goldman and Wall Street reign. Congress appears helpless to discipline the big banks, just as the European Central Bank appears helpless to prevent the collapse of the European Union. . . . Or are they?



Suspicious Market Maneuverings



The shorts circled like sharks in the Greek bond market, following a highly suspicious downgrade of Greek debt by Moody’s on Monday. Ratings by private ratings agencies, long suspected of being in the pocket of Wall Street, often seem to be timed to cause stocks or bonds to jump or tumble, causing extreme reactions in the market. The Greek downgrade was suspicious and unexpected because the European Central Bank and International Monetary Fund had just pledged 120 billion Euros to avoid a debt default in Greece.



Markets were roiled further on Thursday, when the U.S. stock market suddenly lost 999 points, and just as suddenly recovered two-thirds of that loss. It appeared to be such a clear case of tampering that Maria Bartiromo blurted out on CNBC, “That is ridiculous. This really sounds like market manipulation to me.”



Manipulation by whom? Markets can be rigged with computers using high-frequency trading programs (HFT), which now compose 70% of market trading; and Goldman Sachs is the undisputed leader in this new gaming technique. Matt Taibbi maintains that Goldman Sachs has been “engineering every market manipulation since the Great Depression.” When Goldman does not get its way, it is in a position to throw a tantrum and crash the market. It can do this with automated market making technologies like the one invented by Max Keiser, which he claims is now being used to turbocharge market manipulation.



Goldman was an investment firm until September 2008, when it became a “bank holding company” overnight in order to capitalize on the bank bailout, including borrowing virtually interest-free from the Federal Reserve and other banks. In January, when President Obama backed Paul Volcker in his plan to reinstate a form of the Glass-Steagall Act that would separate investment banking from commercial banking, the market collapsed on cue, and the Volcker Rule faded from the headlines.



When Goldman got dragged before Congress and the SEC in April, the Greek crisis arose as a “counterpoint,” diverting attention to that growing conflagration. Greece appears to be the sacrificial play in the EU just as Lehman Brothers was in the U.S., “the hostage the kidnappers shoot to prove they mean business.”



The Nuclear Option



It is still possible, however, for the European Central Bank to snatch Greece from the fire and rout the shorts. It can do this with what has been called the nuclear option -- “monetizing” the debt of Greece and other debt-laden EU countries by effectively “printing money” (quantitative easing) and buying the debt itself at very low interest rates. This is called the “nuclear option” because it would blow up the hedge funds and electronic sharks operated by Goldman and other Wall Street heavies, which specialize in bringing down corporations and whole countries for strategic and exploitative ends.



Will the ECB proceed with this plan? Perhaps, say some experts. It could just be waiting for the German election on Sunday, which the ECB does not want to appear to be influencing.




Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://www.webofdebt.com, http://www.ellenbrown.com, and http://www.public-banking.com. \



Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.

To become a Member of Global Research

The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: crgeditor@yahoo.com

http://www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.

For media inquiries: crgeditor@yahoo.com

© Copyright Ellen Brown, Web of Debt, 2010

The url address of this article is: http://www.globalresearch.ca/PrintArticl...leId=19051

[h3rm35]

Quote:Wild Wall Street plunge caused by computer’s tantrum, regulators find
By LEWIS GROSSBERGER

A bad-tempered laptop computer, furious that a Wall Street trader spilled coffee on it, triggered the near panic that caused the stock market to plunge 1,000 points on Thursday, federal regulators have found.

The accused laptop, a MacBook Pro about three years old, was carried out of the Wall Street offices of Plotnik, Kagel & Fitch in chains today by federal officers as stunned employees looked on in disbelief.

“It was a good computer,” said Bart Trellis, a partner in the firm. “Quiet, kept to itself, never gave us any trouble before.”

The tumultuous trading on Thursday, in which stock prices across the board dropped with sickening speed and then made a recovery, sent shockwaves around the globe and threw Wall Street traders into turmoil.

Until today, no one could pinpoint the cause.

“This was a case of pure petulance,” said Hillary Gill, a spokesman for the Securities Exchange Commission. “The laptop had a temper tantrum when a clumsy broker spilled coffee on it and in a fit of pique it started selling like crazy. Next thing you know the market’s down 1,000 points.”

Earlier rumors that the laptop had been programmed in Pakistan by hackers sympathetic to the Taliban turned out to be unfounded.

Investigators said that if found guilty, the computer would have its memory expunged and then be cannibalized for spare parts.

“We live in an era of increased volatility,” said Lyman Fischel, a vice president of the New York Stock Exchange. “We are being ruled by strange, savage gods I do not recognize. I fear we must make a sacrifice to placate them or they will destroy us. Someone find me a virgin.”

[Scorpio]

I wouldn't go anywhere near the stock market. It's nothing more than a jewish funny money casino.