S&P500 Emini Futures
We had just discussed the possibility that the "Financial Center of the World" might soon be filling out a change of address card based on the fraud of GS, the incest of the Fed, the ineptitude of the SEC, and the impotence of our POTUS.
Then it hit. Billions were lost in seconds. There are many theories as to what happened, much speculation about how it happened, but the street is eerily quiet about WHY it happened.
I had nothing to hide then and nothing to hide now. I'm incredibly bullish on real estate at current prices and still the same champion of Gold I was then. Today Real Estate is dirt cheap compared to what it was 5 years ago and Gold is still incredibly cheap today compared to what it will be 5 years from now. Based on those two facts I could care less where Wall Street's zip code is. I will make my fortune based on that which God created, not man.
Before I digress too far, let's get back to the main point of tonight's post. If you were long today and your position was stopped out, you got robbed. Not a simple street corner stick 'em up style robbery, no my friend this was a highly sophisticated, authorized at the highest levels, con.
We can deploy algorithmic trading programs that enter and exit flash trades in less than a second yet we are still susceptible to a fat finger trade greater than the GDP of Massachusetts....... I'm mean Greece? (same thing)
I'm going to give you a mainstream explanation of what happened below. Believe it if you will. But this my friend you must know, if you were on the wrong side of the market today, you know...Warren's side, Barrack's side, Little Timmy Two Guns side, NOBODY is going to give you your money back. You Are Screwed! It's high time you learned the days of bail out are over and you, you silly little ignorant retail investor, had better learn the lesson.
Now here's what REALLY happened
Wild day on Wall Street leaves electronic exchanges under scrutiny
Washington Post Staff Writer
Friday, May 7, 2010
Rumors about the cause of the chaos were rampant on Wall Street and in Washington. Some traders speculated about human error, such as an electronic trade of stocks entered with the wrong amount. Regulators offered little clarity, saying they would investigate.
Some price swings of stocks defied logic. The shares of Accenture, a consulting firm, fell from $40 to a single penny and then back to $40 again. Procter & Gamble traded at $54 on the New York Stock Exchange. But at the same time, Nasdaq was reporting that the company's shares were selling for $39.
Thursday's dramatic gyrations added fuel to the biggest policy debate in Washington: how to regulate Wall Street. That billions of dollars in stock-market value could be wiped out so abruptly, with such a lack of certainty about the cause, is a reminder of the high stakes involved in a system that is little understood by average investors.(read more)