Read the Friday Afternoon Wrap-Up for 5/3/2013 and the Monday Morning Commentary for 5/6/2013
On May 6th, 2010 – three years ago, today – the Dow “flash crashed” by 1,000 points; much of it occurring in less than 30 minutes – before recovering to lose just 345 points…
While not close to the percentage losses of the 1987 crash; it, too was blamed on advanced COMPUTER programs that simultaneously “kicked in”; DESTROYING all semblance of market liquidity…
In 1987, such programs – euphemistically termed “portfolio insurance” – were not utilized to MANIPULATE markets; but instead, to PROTECT portfolios from falling prices. In other words, the major mutual funds held similarly derived “stop loss” contingencies; so when they were all “turned on” simultaneously, the market became a selling VACCUUM.
Conversely, 2010’s crash was precipitated by MANIPULATIVE HFT algorithms; simultaneously seeking the same trading “catalysts.” And like 1987, they all “kicked in” at the same time, yielding MASSIVE losses for the suckers involved…
Stock Market Crash 5/6/10 (Live Panic!) Incredible!!
I have written exhaustively of the dangers of HFT trading, which currently constitutes 75% of ALL NYSE activity – particularly as Goldman Sachs has a 20% market share. And remember, the (then) largest HFT trader – Knight Trading – nearly bankrupted itself with them last year…
NITE Justice
…while numerous ETFs have DESTROYED investors in like manner…
“GOING BATS”
…as recently as last week…
Artistic Algo paints Smiley Face while Crashing Stock from $10 to $0 in Milliseconds
As relates to PMs; I not only write daily of the destruction wrought by PAPER PM naked shorting, but of how you WILL lose money owning mining shares…
“D-DAY”
…and as of late, closed-end bullion funds…
“PM BULLION CLOSED-END FUNDS – HELPING OR HARMING?”
However, NOTHING depicts how BROKEN U.S. markets have become better than what occurred last week, when a “hacked Twitter account” of the Associated Press news service caused a three-minute market PANIC…
Hacked AP Twitter Account reports of Two Explosions at White House, Obama Injured
In which “more than 260,000 front-month e-Mini contracts traded between 1:09 and 1:12 PM EST, and more than 180,000 front-month 10-Year U.S. Treasury contracts”; creating the same selling VACUUM that as in October 1987 and May 2010…
From a Twitter Hack to the Complete Evaporation of all Market Liquidity in One Chart
Throw in the carnage wrought a week prior in the PAPER PM pits; when HFT computers were allowed to NAKED SHORT tens of billions of gold and silver “contracts”; and you can see why I have long SHOUTED that “PHYSICAL=LIFE, but PAPER = DEATH”…
Hopefully, last week’s “WHITE HOUSE TWITTER CRASH” will serve as the straw that broke the camel’s back for anyone naive enough to believe “markets” are anything but banker-operated slot machines hungry for your life’s savings. If not, I don’t know what else will.
PROTECT YOURSELF, and do it NOW!
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