CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Friday, May 07, 2010
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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13 Comments:
Hmmm, well if people might be willing to pay for that t-shirt just imagine what the asking price would be for a couple of fat fingers...
From Business Insider: Here's A List Of The Stocks In Which NASDAQ Is Cancelling Trades
Hundreds of them literally...
The 2:45 "market" crash is extremely interesting because the market is so fragmented. Much of the trading in stocks is done away from the NYSE now -- so disorderly to chaotic trading can take place.
BTW, some traders were able to buy stocks for the market minimum, a penny, during the 2:45 Crash chaos.
Here is link to fragmented stock market liquidity problems.
What would people pay for this guy's stock advice who loses it and starts screaming when the market was tanking?
When the stop losses are run down, listen to the panic in the S&P500 pits. 3 points away from the curbs.
Gettingrational, that's the only other place I've ssen that isn't using the fat finger or electronic trading excuse. He seems to be saying the same thing as the CEO of the NYSE said right after the close yesterday.
The CEO of the NYSE talked about the floor traders stepping out of the market which then left the electronic trades to go looking for any open orders no matter how low the offer price.
He said they "slowed down" trading, which meant a pause in trading, "not a halt" but the electronic exchanges don't have to follow their lead and can keep filling orders.
For some reason, CNBC keeps hiding this story. It's obvious that is what caused the huge drop. Selling into a market with no bids.
Here's the transcript, the video doesn't seem to be working for me today.
http://www.cnbc.com/id/37004249
Video link is in the story.
http://www.cnbc.com/id/15840232/?video=1487130975&play=1
there is no way this was a fat finger trade.
you cannot enter a trillion dollar trade error. it's simply not possible.
my bet is some bad price data loused up the programs, and then we blew through the circuit breakers. freed of the requirement to trade at the best as opposed to the quickest execution, the market turned into a food fight and a tsunami of bad data and ticks.
i've never seen anything like it. i don't know whether to be appalled that it could happen or impressed that trading didn't lock up.
we got some absurd prices yesterday and have not had any of the trades broken.
this is still a very shaky tape.
if this has been during a raging bull tape instead of one wobbling over euro fears, i doubt this would have been so severe.
nothing drives volatility like sovereign risk mated with a liquidity crisis.
OA, morganovich. et al., the fact that there was no liquidity and a drop to a penny per share is very scary isn't it? I hope for an emergency meeting this weekend between the feds and the fragmented markets players.
No liquidity = No market ! Yikes.
"there is no way this was a fat finger trade"...
Well morganovich this is not the first time that excuse has been used...
I mean its possible right?
Probable, well now that's something else...
More disturbing than the market makers can just opt out without telling anyone is the fact that the media continues to say fat finger error.
Maria Bartiromo who did the NYSE CEO interview correctly is saying that lack of liquidity was the issue.
But I'm not really sure the rest of the CNBC reporters even understand that. The other CNBC reporter she was talking to kept saying stupid stuff like yeah there are supposed to be checks in the system with people calling to ask did you really mean billion or was it million.
I know most of the reporters aren't necessarily knowledgeable about the issues in real time, but once the information is there, they should understand the information. The average Ebay seller understands that no or few bids means a low price. Why can't supposed financial journalists get that?
Stocks down in day, month, year
All three indexes ended in negative territory for the year. All three indexes also closed lower for the fourth straight session and the second straight week.
The selloff from the late April highs has been substantial enough that the Nasdaq, with a loss of 10.5%, is now considered to be in a correction.
The Dow and S&P 500 are also approaching double-digit losses, down 7.4% and 8.7% respectively.
The 2.45 market crash is more managed centrally planned socialist capitalism.
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