21-Jan-11 News - Bangladesh stock market crashes 9% in 5 min

[John]

21-Jan-11 News -- Bangladesh stock market crashes 9% in 5 minutes

Thousands of investors riot as trading is halted.

** 21-Jan-11 News -- Bangladesh stock market crashes 9% in 5 minutes
** http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e110121#e110121

[vincecate]

The 9% drop was on the 20th and as of 2:08 pm on the 21st (local time) the market is still closed. The volume was like 1/10th normal on the 20th. I think it is safe to say the only reason it has not dropped more today is that the market is closed. If there were buyers the market would be open. Wonder how many days it will be closed. It seems very doubtful that closing the market will restore investor confidence. It probably is just delaying the rest of the crash.

http://www.dsebd.org/
http://www.dsebd.org/recent_market_information.php

[Guest]

I recall phoning in an order on the mini S&P back in the LTCM mess in 98 and then ordering a stop. I was stopped out about the time I got the stop price out of my mouth. I couldn't even imagine trading the mess we saw in the fall of 08, where I saw the Dow move up 800 points in 40 minutes then fall around 400 into the close on 10/10/08. This was pure and simple market manipulation to force rallies by the banks. The wildcard is if the regulators ever make them mark to market, but I suspect they will end up like the Japanese banks, with a boat load and no way to get out of it. As we sit, the CDS's on Japanese debt are rising. There is a $5 trillion haircut coming soon. The LEH mess will be mere childs play.

[Guest]

Not sure where to address this, but I was wondering what your thoughts are on Chinese Troops being stationed in N.Korea's "Special Zone".

Some north Korea watchers that I follow believe that China is slowly increasing troops in an anticipation of a coming collapse of the Kim family regime. By having troops in the north, they'll have a reason to send in more when there is a collapse and that might be used as an excuse by China to demand that RoK/US troops not enter north Korea.

Curious your thoughts.

[jldavid47]

People that think stop-loss orders will protect them have extremely short memories. During the "flash crash" in May, 2010, many investors got burned when their stop loss orders were triggered, but not executed until prices were far lower.

John is also correct that the shorts may not get paid even if they are correct. I actually posed a question to a former CBOE floor trader a couple of years before as to whether put buyers would be guaranteed getting paid off in the event of a market meltdown. He was incredulous and insisted that it was impossible for them not to get paid as the exchange is the guarantor. I'm still not so sure. I mean, what if the CBOE itself becomes insolvent due to a market melt down?

[vincecate]

People that think stop-loss orders will protect them have extremely short memories. During the "flash crash" in May, 2010, many investors got burned when their stop loss orders were triggered, but not executed until prices were far lower.

I actually expect that after the flash crash many more people have put in stop loss orders thinking that they will have protection.

That flash crash was started from selling in one account. When many many accounts start selling things will really fall. Also, the thing that seems to have saved it is the widely believed rumor that it was a "fat finger trade" which made it ok to buy. If next time people think "we are starting a bear market I should get out", instead of "some fool hit the wrong key and we can buy cheap", then things will be different.

[vincecate]

http://www.dsebd.org/

The Dhaka Exchange closed early Wednesday, was only open for 5 minutes Thursday, and was closed all Friday. As of a few minutes after 9:00 am local time it is still closed Monday. Report below says trading "will resume on Tuesday, with the circuit breaker withdrawn".

http://bdnews24.com/details.php?id=185335&cid=4

[vincecate]

Amazing. It bounced back almost to where it was before the crash.
I don't think this is over yet.

http://www.dsebd.org/

[John]

A mid-crash picture.

John

[vincecate]

http://www.dsebd.org/

Up again like 6.5% at the moment. Wild. Still with John that this looks like some wild swings that are part of a general crash.