May 9, 2010
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Dark Pools
On Thursday afternoon May 6th in the 15 minutes between 2:42 and 2:47 PM
Wall Street almost committed suicide...
In those few frantic minutes the scenario of Stanley Kubrick’s “Hal 9000”
Became reality... as machines took over markets and shaved almost 1000 points
From the Dow Jones Industrial Average before humans were able to take charge...
The hedge funds’ algorithmic computers were programmed to sell at 1095.74
The 200-Day Moving Average of the S&P Industrial Average
Resulting in more than 2.4 billion shares being dumped by these “Flash” machines
Entering their “High-Frequency” trades executed in nano-seconds...
The New York Stock Exchange was powerless as their 90-second rule was overwhelmed
By the flood of orders that could not find buyers… so the massive sells were shunted
To other fully-electronic “Hal” exchanges... which took on the bulk of the panic sells
And made markets… driving stocks like Accenture, a $26 Billion dollar company
From a price of $41 that morning to 4 cents a share that afternoon!
The abolishment of the Glass-Steagal Act which did not allow banks
To enter markets other than mortgage and commercial lending...
The proliferation of non-bank mortgage hustlers with extremely loose practices...
The take-over of the mortgage business by badly-regulated quasi-government agencies...
The allowance of "naked" short-selling without first borrowing the stock...
The systemic risks that are built into derivative securities
Based upon fraudulent collateral...
All this financial chicanery by sharp individuals and the technical mastery of geekdom
Created these destructive dark pools of paper promises
That now threaten the very existence of the world’s capital structures...
We are at the brink…
Let’s hope someone with some common sense taps the delete button on these guys
Before it's too late...
Comments (3)
yes.
I agree also. What a heart-stopping moment!
give me a garden and a island home anytime! - away from the failure of "well-organized" society.
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