Financial topics

[Higgenbotham]

Let's say that April 4 was the top of the stock market bubble, hypothetically. Would there be any indication this should be so?

Going back 14 years there was a panic in the stock market on April 14, 2000. This is little known.

Bleak Friday on Wall Street
April 14, 2000

But the statistical standout could be this: the Nasdaq fell more than 25 percent this week, trouncing the 19 percent fall that began Oct. 21, 1987, Black Monday.

The Nasdaq composite index shed 355.61 points, or over 9 percent, to 3,321.17, its biggest one-day decline on record.

http://money.cnn.com/2000/04/14/markets ... s_newyork/

This should say October 19, 1987.

What's also known is that, so far, many of the various stock market indexes have made their highs near the time they made their year 2000 highs.

The next piece of the puzzle is that when the market made its high on April 26, 2010, the flash crash occurred 10 days after that high. 10 days after April 4 is April 14. A similar thing happened in 2007. The stock market made its closing high on October 9, 2007, then fell hard 10 days later, on the anniversary of the 1987 crash.

Also mentioned recently is that 2 of 3 Crisis Wars for the US started in mid April - the Civil War on April 12, 1861 and the Revolutionary War on April 19, 1775.

[aedens]

http://freebeacon.com/national-security ... y-clinton/

[gerald]

Let's say that April 4 was the top of the stock market bubble, hypothetically. Would there be any indication this should be so?

Going back 14 years there was a panic in the stock market on April 14, 2000. This is little known.

Bleak Friday on Wall Street
April 14, 2000

But the statistical standout could be this: the Nasdaq fell more than 25 percent this week, trouncing the 19 percent fall that began Oct. 21, 1987, Black Monday.

The Nasdaq composite index shed 355.61 points, or over 9 percent, to 3,321.17, its biggest one-day decline on record.

http://money.cnn.com/2000/04/14/markets ... s_newyork/

What's also known is that, so far, many of the various stock market indexes have made their highs near the time they made their year 2000 highs.

The next piece of the puzzle is that when the market made its high on April 26, 2010, the flash crash occurred 10 days after that high. 10 days after April 4 is April 14. A similar thing hpapened in 2007. The stock market made its closing high on October 9, 2007, then fell hard 10 days later, on the anniversary of the 1987 crash.

Also mentioned recently is that 2 of 3 Crisis Wars for the US started in mid April - the Civil War on April 12, 1861 and the Revolutoinary War on Arril 19, 1775.

How interesting -- and April 15th is generally when tax returns are due --- hmmm

[Higgenbotham]

Yes, and last year there was a bombing in Boston on April 15. Created quite a panic.

[aedens]

We are asking questions as rational people.

[aedens]

The business plan is we will sift the ashes as we moved away.

[Higgenbotham]

What struck Brad about his visit to Goldman Sachs was not only that Levine and Morgan were willing to spend time with him, but that they took the ideas from their conversations to their superiors. Levine seemed particularly concerned about the stock market’s instability. “Unless there are some changes, there’s going to be a massive crash,” he said, “a flash crash times ten.” In conversation and in presentations, he impressed the point upon Goldman’s top executives, and also asked, “Do you really need the only differentiator in the market to be speed? Because that’s what it seems to be.” It wasn’t all that hard for the people who ran Goldman Sachs to see the source of the problem, or to see why no one inside the system cared to point it out. “There’s no upside in it—that’s why no one ever steps out on it,” said Levine. “And everyone’s got career risk. And no one is thinking that far ahead. They are looking at the next paycheck.”

A long string of myopic decisions had created new risks in the U.S. stock market. Its complexity was just one manifestation of the problem, but in it, the Goldman partners both felt sure, lay some future calamity. The sensational technical glitches weren’t anomalies but symptoms. And a stock market calamity, Ron Morgan and Brian Levine both thought, would end up being blamed generally on the big Wall Street banks, and specifically on Goldman Sachs. Goldman earned $7 billion a year from its equity business; that business would be put at risk by any crisis.

http://www.e-reading.ws/txt.php/1027020 ... Revolt.txt

This is the text file of Lewis' book "Flash Boys".

[Higgenbotham]

https://www.google.com/search?hl=en&sou ... Vph3_EflKQ

Interesting to search for some text out of this quote from Lewis' book. No discussion out there.

[aedens]

Shaun McCutcheon is to smart to run for officel.

[Higgenbotham]

The HFT guys didn’t need perfect information to make riskless profits; they only needed to skew the odds systematically in their favor. But, as Brad put it, “What you’re looking for ultimately is large brokers who are behaving idiotically with their customers’ orders. That’s the real gold mine.”

When Wall Street decided where to route their clients’ stock market orders, they were now greatly influenced by the new system of kickbacks paid and fees charged to them by the exchanges: If a big Wall Street broker stood to be paid to send an order to buy 10,000 shares of Intel to BATS but was charged to send the same order to the New York Stock Exchange, it would program its routers to send the customer’s order to BATS.

To illustrate how stupid routing can be, say you have told your Wall Street broker—to whom you are paying a commission—that you wish to buy 100,000 shares of Company XYZ at $25 and now, conveniently, there are 100,000 shares for sale at $25, 10,000 on each of ten different exchanges, all of which will charge the broker to trade on your behalf (though far less than the commission you have paid to him). There are, however, another 100 shares for sale, also at $25, on the BATS exchange—which will pay the broker for the trade. The sequential cost-effective router will go first to BATS and buy the 100 shares—and cause the other 100,000 shares to vanish into the paws of high-frequency traders (in the bargain relieving the broker of the obligation to pay to trade).

http://www.e-reading.ws/txt.php/1027020 ... Revolt.txt