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The economic problems in Europe are going to hit the US hard
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WoodlandsOwl Offline
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Post: #1
The economic problems in Europe are going to hit the US hard
04-jawdrop And we keep printing and spending money just like Europe.

Dow drops over 900 on credit, European concerns

Stocks plummeted in a flashback to the panicked trading of 2008. Investors fled everything from stocks and risky bonds and poured money into safe assets such as U.S. Treasurys.

Stocks began the day in negative territory but took a sharp dive south in the afternoon as selling built up and some indexes fell through key technical levels, sparking new waves of selling, investors said.

As losses piled up, the Dow Jones Industrial Average plunged more than 900 points. Key short-term credit markets—such as the rate for three-month Libor—began to show signs of stress and corporate bonds tumbled. The Dow was recently down about 485 points to 10380.

A 20% drop in the Dow would have been needed to halt trading. After 2:30 p.m. EDT, the 20% standard goes into effect. Before then, a 10% drop would have triggered at least a 30-minute halt. For the second quarter, 10% equals a 1,050-point drop in the Dow industrials while 20% equates to 2,150 points.

The exchange first implemented the circuit breakers in the wake of the market's crash in October 1997. In 1998, the New York Stock Exchange set the triggers at 10%, 20% and 30% declines in the Dow for three levels of halts.

The S&P 500 and the Nasdaq Composite, which also saw steep intraday drops, were down more than 4% each in recent activity.

Credit markets, too, are beginning to show signs of stress. Three-month Libor, the benchmark rate for billions of dollars in debt, shot to 0.42 percentage point from 0.37 percentage point, traders said. Corporate bond indexes also tumbled.

"It's getting pretty ugly out there very fast," Guy Lebas, chief fixed income strategist at Janney Montgomery Scott. "There are definitely some major concerns that are escalating this afternoon."

Investors remained deeply worried Thursday about the unfolding drama of Europe's efforts to prop up Greece's finances. Despite boisterous street protests, Greece's parliament passed a bill with austerity measures that will give the country access to an assistance package jointly offered by the European Union and International Monetary Fund. Other EU members will take votes in their respective parliaments soon to approve spending on the package, with a first test expected in Germany on Friday.

"A lot of traders are getting carried out of there seats. There are lots of liquidations including hedge funds out of riskier assets," Michael Franzese, head of Treasury trading at Wunderlich Securities in New York. "No one was expecting this sell off in stocks and the euro and a flight to quality trade is in full effect and it not yields levels it just capital preservation."

.While the bailout is expected to pass in Germany and elsewhere, it remains unpopular among voters who don't want to see their respective countries' resources used to solve Greece's problems. Traders said that any hints of populist backlash could slow the package's implementation or lead to omission of elements needed to prevent global economic contagion.

"Some of the panic-mode has come in now," said Jay Suskind, senior vice president at Duncan-Williams. "What you're seeing in Greece—even the pictures on the television with the protests starts to spark some real fear."

With about an hour of trading to go, New York Stock Exchange composite volume has already topped 8 billion, making this the second-busiest day of the year in the market. The 2010 high was 8.4 billion shares, set on April 16 when the government filed fraud charges against Goldman Sachs.

Traders described Thursday's trading as driven largely by automated sell orders, which piled up after several technical barriers were breached, in particular the 1150 level on the S&P.

"A lot of people thought we had support around that level, so there was some disappointment that it didn't hold," said Phil Roth, chief technical analyst at Miller Tabak.

But he added: "The numbers themselves are a little less important than the manner in which the market gets there. The important thing is that we've had a very non-traditional bull market, without any major correction or several years of advances alternating with sideways periods. This could be the thing that sets off a real correction, but we'll have to wait and see."

http://online.wsj.com/article/SB10001424...Collection
05-06-2010 02:37 PM
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DrTorch Offline
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Post: #2
RE: The economic problems in Europe are going to hit the US hard
DJIA has bounced back significantly.

I think the most certain thing is that no one knows for certain what's going to happen.
05-06-2010 02:54 PM
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WoodlandsOwl Offline
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Post: #3
RE: The economic problems in Europe are going to hit the US hard
(05-06-2010 02:54 PM)DrTorch Wrote:  DJIA has bounced back significantly.

I think the most certain thing is that no one knows for certain what's going to happen.

Exactly, so everyone is bailing on stocks and going for T Bills.
05-06-2010 02:58 PM
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THE NC Herd Fan Offline
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Post: #4
RE: The economic problems in Europe are going to hit the US hard
So the trading "error" was it an accident by an incompetent trader or intentional action by disgruntled employee?
05-06-2010 07:26 PM
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smn1256 Offline
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Post: #5
RE: The economic problems in Europe are going to hit the US hard
(05-06-2010 07:26 PM)THE NC Herd Fan Wrote:  So the trading "error" was it an accident by an incompetent trader or intentional action by disgruntled employee?

Or a genius who capitalized on it.
05-06-2010 07:28 PM
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THE NC Herd Fan Offline
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Post: #6
RE: The economic problems in Europe are going to hit the US hard
(05-06-2010 07:28 PM)smn1256 Wrote:  
(05-06-2010 07:26 PM)THE NC Herd Fan Wrote:  So the trading "error" was it an accident by an incompetent trader or intentional action by disgruntled employee?

Or a genius who capitalized on it.

I can't believe a billion share order doesn't have to be reviewed by someone a little more senior.
05-06-2010 07:44 PM
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WoodlandsOwl Offline
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Post: #7
RE: The economic problems in Europe are going to hit the US hard
(05-06-2010 07:28 PM)smn1256 Wrote:  
(05-06-2010 07:26 PM)THE NC Herd Fan Wrote:  So the trading "error" was it an accident by an incompetent trader or intentional action by disgruntled employee?

Or a genius who capitalized on it.

Now the SEC has something to do other than watching Porn-- Investigate this BS

CNBC's Bartiromo: 'That is Ridiculous. This Really Sounds Like Market Manipulation to Me'

While everyone is scratching their heads and trying to figure out how the Dow Jones Industrial Average (DJIA) lost nearly 1,000 points before rallying back to lose only 347 points – it appears not to be limited to just one stock.

On CNBC’s May 6 “Closing Bell,” correspondent Matt Nesto explained that investigators for both the stock exchanges and for Citigroup, the firm that some are pointing fingers at for a so-called trader error, have narrowed it down to a futures index called the E-mini S&P 500.

“A person familiar with the Citi investigation said one focus of the trading probes were the futures contracts tied to the S&P 500 stock index known as the E-mini S&P 500 futures and in particular that two-minute window in which 16 billion of the futures were sold,” Nesto said. “Again, those sources are telling us that Citigroup’s total E-mini volume for the entire day was only 9 billion, suggesting that the origin of the trades was elsewhere.”

Nesto named eight stocks that were hit with the supposed computer error/bad trade, if that’s indeed what happened, that went all the way down to zero or one cent, including Exelon (NYSE:EXC), Accenture (NYSE:ACN), CenterPoint Energy (NYSE:CNP), Eagle Material (NYSE:EXP), Genpact Ltd (G), ITC Holdings (NYSE:ITC), Brown & Brown (NYSE:BRO), Casey’s General (NASDAQ:CASY) and Boston Beer (NYSE:SAM)

“Now according to someone else close to Citigroup’s own probe of the situation, the E-Minis trade on the CME,” Nesto continued. “Now Maria, I want to add something else just in terms of these erroneous trades that Duncan Niederauer, the NYSE CEO was just talking about. I mean, we’ve talked a lot about Accenture, ACN. This is a Dublin-based company. It's not in any of the indexes. If you look in the S&P 500, for example, I show at least two stocks that traded to zero or one cent – Exelon and CenterPoint. If you look in the Russell 1,000, I show Eagle Materials, Genpact, ITC and Brown & Brown, also trading to zero or a penny, and also Casey's General Stores, as well as Boston Beer trading today, intraday, to zero or a penny. So those have at least eight names that they're going to have to track down on top of the Accenture trade, where we have the stock price intraday showing us at least, we'll assume, a bogus trade of zero.”

Nesto calling these trades “bogus” drew backlash from the host and CNBC veteran Maria Bartiromo, who said those trades sounded like “market manipulation” to her.

“ That is ridiculous,” Bartiromo replied. “I mean this really sounds like market manipulation to me. This is outrageous.”

According to Nesto, these are frequent occurrences, at least at the NASDAQ exchange and if you make a trade a lose money, there’s no recourse.

“It happens a lot, Maria. It really does. I mean, we could probably ask the NASDAQ, they may not want to say how often it happens, but it happens frequently. And they go back and they correct. And the thing that stinks is if you in good faith put in a trade and made money and then lost it, you lose it. And there's no recourse and there's no way to appeal.”

http://www.businessandmedia.org/articles...74136.aspx
05-06-2010 07:46 PM
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NIU05 Offline
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Post: #8
RE: The economic problems in Europe are going to hit the US hard
Todays trading was BS. There was NO economic reality related to todays actions. .....and the story that a Citi trader hit a B for billions instead of a M for millions, that is not even a good lie.

Now there are MAJOR economic issues outstanding and they will be played out from here. DEBT ...DEBT...DEBT too much still hangs over us. Saw a chart yesterday that even with trillion dollar deficits , America's net borrowing DECREASED 2%. People continue to deleverage thus lower assets prices to continue.
05-06-2010 09:26 PM
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Lord Stanley Offline
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Post: #9
RE: The economic problems in Europe are going to hit the US hard
(05-06-2010 02:54 PM)DrTorch Wrote:  DJIA has bounced back significantly.

I think the most certain thing is that no one knows for certain what's going to happen.

You sound like you need a one handed economist.

Quote:Harry Truamn - "Give me a one-handed economist! All my economists say, On the one hand on the other."
05-07-2010 08:34 AM
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ummechengr Offline
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Post: #10
RE: The economic problems in Europe are going to hit the US hard
Hey look...it's dropped more than 250 points...again.

Link
05-07-2010 10:04 AM
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Lord Stanley Offline
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Post: #11
RE: The economic problems in Europe are going to hit the US hard
All my gains of 2010..... gone!
05-07-2010 10:14 AM
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jh Offline
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RE: The economic problems in Europe are going to hit the US hard
http://money.cnn.com/2010/05/10/markets/.../index.htm
Quote:The Dow Jones industrial average (INDU) gained 348 points, or 3.4%, after having been up as much as 454 points earlier. The S&P 500 index (SPX) surged 40 points, or 3.7%. The Nasdaq composite (COMP) rallied 92 points, or 4%...

In the aftermath of that selloff, the Securities and Exchange Commission and the major stock exchanges all agreed Monday on the basic framework to strengthen "circuit breakers" and methods for handling erroneous trades.
05-10-2010 03:19 PM
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B-rock Odrama Offline
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Post: #13
RE: The economic problems in Europe are going to hit the US hard
Obama will save them. We just need govt to take over everything so that things will get better. The private sector has destroyed America.
05-14-2010 11:50 AM
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