Re: The Dow SNAFU yesterday - The biggest financial heist in history?

The events yesterday were remarkable. So remarkable and so profitable (if you were short in just about anything anywhere) that you have to wonder who benefitted, and did they know. Was anyone usually short on the market?

You can accept the cockup theory or you might wonder.

The timing was too good.
The action too fast.
The implications for global markets too systemic.
The opportunity to make money and never get caught too convenient.

My guess is that we have just witnessed the biggest financial heist in history....

What do you reckon?

This spread like a contagion around the globe. Every market, shares, bonds, currency commodities...... off market sales. It wasn't just the dow and nasdaq.

They didn't. Most bonds didn't move at all. Commodity pits were closed at the time it happened.
Oil didn't move much at all during the time period in question for example.
Most foreign markets were closed at that time.

Kinda stupid to plan the "greatest heist ever" right when all ancillary markets are closed.

Trades on affected components were busted. By the time the European & Asian markets opened the US markets had already corrected.

Also you seem to discount the massive cost required to pull this off too. Like any profit they make is profit but lets ignore the billions required to push market down like that.

You would buy US Dollars
Sell Greek,Spanish, Irish, UK soverigns
Buy Gold
Sell Euros

^^^^ These markets are liquid as hell....

.... and thats just the beginning.....its not rocket science

Utter BS. Thank god you weren't running this "master conspiracy of doom" you would somehow manage to lose 100% in your own manipulation. :rofl:

Please show me a chart that shows Greek debt correlates inversely to the DOW.

The Euro was under pressure before the "master conspiracy of doom" began and is still as the same level.

You seem to know nothing about this subject Statistical.

Between 14:40 and 14:50 the dollar index moved from 61.34 to 61.73. WOW what a massive move. Not a whole 0.6% gain. That also assumes they perfectly timed the bottom and top. The top was very narrow. Less than 18 seconds later it had fallen back to 61.68. 6 minutes later it was below 61.34.

Of course that ignores the massive cost associated with driving key stock down to such levels to crush the market. Billions upon billions of dollars were lost on the sell side during the decline. All that cost to capitalize on a 0.6% move in the Dollar.

:rofl:

... and in case you haven't noticed it kept rising....

That was the peak. Dollar index never exceeded that and fell back very rapidly.

You still discount the concept that IT COST A MASSIVE AMOUNT OF MONEY TO MOVE THE MARKET DONWARD TO BEGIN WITH.

The idea that the scam was to lose 50,000 basis points in P&G only to "make it up" by a 30 basis point move in the dollar is utterly silly.

I could generate a lot of cashflow selling $100 bills for $98 but guess what? It is unlikely I would turn a profit.

On edit: Also I wrong at 2:42 (which is when NYSE detected an issue) the dollar index was 61.50 not 6.173 cutting the "master scammers of doom" profit in half.

The sell off only lasted 10 minutes.

I have been short the Euro since January. Maybe that means I am in on the conspiracy too. I just started in January to avoid suspicion.

Good thing that totally unexpected Greece thing happened to move the Euro up while I waited.

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a stunt like that would carry far more risk than reward.

Get fingered for doing such an incredibly audacious scheme almost certainly would guarantee that any political influence you might have would fade into the woodwork while the feds pounded not only the perpetrators into the ground but also put incredibly draconian reform measures in place to prevent something like that from ever happening again and that could bring the party to a quick end.

and even if you were able to slide out of the country unscathed (with all your ill gotten booty), most other countries would be also on the look out for you as the damage to their markets would be extensive with the subsequent loss of confidence.

who did the put options on 9/11. No one seems to know-or they really don't give a shite as long as some people made gads of money.

The amount of money required to make the whole deal worthwhile in terms of the DOW going down and manipulating the foreign exchange rate to benefit from prior knowledge of that requires ... Jesus, I can't even begin to imagine how much capital.

But gold buys are an interesting point, especially as gold shot up yesterday. Then again. that's easily taken as an obvious response to the drop in the DOW -- the price of gold didn't change substantially until after the DOW started its precipitous drop.

because the indexes are tanking?

I assume the majority of there were stop-loss orders. It is not only common practice to put stops on your holdings, but many advisors say that not doing so is a very risky practice. Rather than lose a small percentage on a stop order, a day like yesterday can result in huge portfolio losses before investor knows what hit them.

It is likely that because of concerns about Greece, many funds and investors had especially tight stops and that sudden plunge would have a great impact then normal.

As far as your underlying point that it was not deliberate manipulation, I tend to agree. For one thing, a lot of these trades are being reversed. If any triggered it, even the biggest firms have difficulty driving the large American indexes. The people who made the most profits were probably day traders.

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The exchanges have the options in certain situations to reverse trades.

Looks like the NYSE and NASDAQ are canceling some trades with more extreme values that occurred during the plunge:

http://247wallst.com/2010/05/06/nasdaq-will-cancel-trades

The CME (commodities) is apparently not canceling any trades.

Even if you pretend that it was intentional that means CITI lost billions of dollars intentionally? Why? To make money?

The market tanked because someone (or more likely something) sold all the way day and blew out any buyers. That account is now showing a giant loss.

Then when you consider that trades in affected securities for the 20 minutes of the straight up & down move of 700 points have been nulled and the fact that the market ended near where it started that crash it is hard to believe it is some grand conspriacy.

I mean what is the conspiracy Citi wanted to distribute billions of dollars in gains to hundreds of thousands of people just for fun?

Source: CNBC

The cause of Thursday’s nearly 1,000-point stock market meltdown was electronic trading, not a “fat finger”, New York Stock Exchange Euronext CEO Duncan Niederauer told CNBC Friday.

Niederauer was referring to reports on Thursday that a trader error caused the market's sharp swing by typing a "b" for billion instead of an "m" for million.

“The rest of the market has to respect us and not trade through us,” Niederauer said, referring to the “60 to 90 second” period when stocks such as Procter & Gamble and Accenture , fluctuated violently.

“Everybody has to be concerned about this technology. How fast is too fast? When is enough is enough? That’s what we’re trying to figure out,” Niederauer said.

Niederauer did not choose to get into a feud with Nasdaq CEO Bob Greifeld, who blamed the NYSE for the error. “Let’s stop the fingerpointing and move the ball forward. We’re not walking away from this but let’s be constructive.”

The market is roughly where it was before the "event" and some traders who put in massive orders (however it was done bad program trading, mistake, improper trigger, glitch, intentionally pushing market down) lost a ginormous amount of money.

I do think there are people that have learned how to manipulate the market in a lot of ways, for their own personal gains. They can get rich very quick. And that is the purpose of the "game". Make as much money as you possibly can, as fast as you can, without getting caught in anything illegal. Get in your new sports car in the evening and drive home to your mansion. Go to bed and dream about how much money you are going to make tomorrow...

You have to spend money to make money they say :)

At 14:40 yesterday the DOW was @ 1116.98. As I type it is 1,119.19. Not a very good "swindle".

If the massive selling of shares at market was part of some "uber" conspiracy to steal money it certainly backfired.

...that some people make money off the market no matter if it is up or down??? That some people make money off the transactions themselves?

I don't think the intent was to "steal money."

However the claim of the OP is that the 700 point decline and massive rebound was some grand conspiracy to steal trillions.

The people that lost the most money are those who lost billions selling Accenture all the way down $0.04. Whatever caused the problem to say it was a grand conspriacy is silly.

Unless the conspiracy was the mass redistribution of wealth from the likes of Citi to people who happened to be in the right place at right time.

Its not just the DOW - it is all markets.

And even if it were true - that makes no difference. The money was made in the trading period immediately after the shit hit the fan. Its now been banked and logged in the dealing rooms who were short - some of them were lucky - the question is - did some others know it was going to happen.

The best stock/market tip of all time.

A: "Be short at 2.40pm on 6 May"

B: In what?

A: "Anything - it doesn't really matter."

So you saw some paper profits for less than 24 hours before the trade was busted. Per notification I got from my broker they are already busting trades and there is no resource, no appeal. If you have an affected security it has been undone.

Still even if someone DID profit it wasn't the people who caused the crash. They lost their shirts. A lot of money changed hands and it was all in the wrong direction.

Someone sold nearly $2 billion worth of Accenture all the way down. They started at $41 a share and busted the whole buyer stack down to $0.00 on bid side. Their average selling price had to be well below $20 (maybe even lower). Thus $1 billion in equity was wiped out from that trading desk.

Not the smartest conspiracy in history of the world.

Merely repeating the BS over and over again and ignoring the counter arguments doesn't make them untrue. The unwinding of some trades is like rebuilding the house at ground zero.... when the entire block got blown up.

if they're the ones who caused it. It worked like this: they dumped a billion shares they didn't have, dropping the share price in half, then bought them back just as quickly at half price.

That means they made half the value of the billion shares they dumped, whether or not they had those shares to dump in the first place.

That's the fraud. That's why it could be the biggest heist in history.

That's why we'd better have a damned good explanation of this one along with a hefty fine equivalent to what they made on the deal plus some extra.

Oh yeah except for the fact that trades were busted and the market is where it was prior to the "scam".

:rofl:

Tinfoil on aisle 6.

and now they're nearly full price again. Since they sold at full price, bought at half price, and now they're full price again, they made money. Get it yet?

"The hearty laugh bespake the empty head"

Have you read about naked shorting and the billions it sucks out of the market every year?

However that has nothing to do with the OP tinfoil fantasy.

Post your own thread on how there is nothing to see here and discuss it amongst yourself. Your harassment of people who are not as foolish as yourself in this thread is getting boring.

:spray: it's ok, I'm fine now.

Thanx, I'm running a little short.

;)

...and just displayed it to Washington yesterday while Congress was deciding whether or not to rein in the pirates.

And another factor that makes the timing look unusually convenient.

You really would have thought that the all the new robustness work that's gone into the financial system post Lehmans that something like this should be impossible to pull off.......

My guess is that when the dust settles you will find that not only did a mistake get made, but that for a range of coincidental reasons a whole set of protective systems also failed, and perhaps were disabled.

Goldman Sachs CEO has no clue (he's on CNBC now)....

Yeah right.

As is mine. After the last 10 years you better believe I don't discount this possibility.

willful intent. The CIA trains people in this stuff.

since most of the trades between 2-3 p.m. that seemed to benefit from the ensuing downfall were canceled.

As I have said above now about three times - there was money to be made everywhere in the world. Not just on the Dow and the Nasdaq.

Its as much BS as the fat finger theory which circulated immediately after the events... does anyone seriously think that something like this can be caused by a single f**ked up trade.

Something like this was a shit load more sophisticated than that.

And in any case, I'm not talking about the "fat finger theory" so railing against it here is so much misdirection. You can say "this was incredibly sophisticated" or what have you, but until you offer actual alternative evidence instead of demanding people counter your arguments without actually presenting any argument, you're just yelling.

... everywhere.... I could find you a thousand predictable pricing responses to a 9 percentage point fall in the Dow. Any trader could recite dozens off the top of their head.

Neither of which moved. :rofl:

If you had behind the "heist of the century" they would have shot you because you ended up giving away all of the money.
Massive transfer of wealth except in the wrong direction.

Something to consider. You'd need trillions of dollars in either capital or credit to make the risk worthwhile. gold isn't nearly enough (there are around 1750 tonnes of gold publically traded, or 61,729,433 oz. If you owned all the gold in the world, and the price moved ten dollars/oz. you'd make 617,000,000 dollars. Nice, but not worth putting a billion on the table for.)

any trades would have to be ones you could execute immediately, get paid in cash forand run with the money immediately. They'd have to be small enough not to get attention, and probalby over the counter. Remember, on the big exchanges, the only ones worth playing in for billions, money doesn't change hands during the day, but at close. Nothing's final until then.

anyone would believe that the interface on trading programs would be designed to accept numerical amounts as a text string.

I indicate bond face values as 5K and shares in lots of 100 as 7L.
Ironically you are much likely to make a mistake of a single digit 1000000 vs 100000.

While I don't use b or m I could see major brokers use them. Something like 10m to sell 10 million dollars worth of a security.

Still I don't think it was a manual error that caused it. The order flows were massive and crushed all buy limits orders.

More likely a program trading network issue. These systems are massive complex and looking for hundreds of triggers to guestimate when a stock will move and buy (or sell) before it moves. Of course there are competing systems working against the same data and often major brokerages will have dozens of these systems networked together pulling from same pool of capital and then another layer of software above that to manage and track it.

They execute hundreds of thousands of orders per second and without any human intervention. Kinda like having a chess program on your PC and setting both players to computer. The systems are far too complex and contain far too many lines of code written by fallible humans and execute far too fast. Congress needs to severly regulationt them.

but I still don't buy this story.

I mean people could relate with him starring in this great movie. It's only a matter of time...

It would make me feel better, in view of the fact that I filed my final unemployment claim last Sunday. I'm now a 67 year old with big problems and no answer. If I had been among the Wall Street elite, I'd have no reason to worry. Same for everyone else in this same stinking, sinking boat.

I think this is interesting to watch for a couple of reasons. I'm not endorsing Jim Cramer, but check this out: First, follow Jim Cramer's reaction and analysis from one minute into the video till around minute six- and how it changes, much less the co-hosts who are even more clueless than he is about what's going on.

In response to one of the cohosts saying (basically) "Don't you think what happened here? This is an absolutely stupendous story!"

Cramer responded in the affirmative but continued: "It's the greatest story never told. You'll never know what happened there. It's important to obfuscate on that one."

That's at about the six minute (or so) mark.

I've listened to that video a couple of times. I don't understand stock markets, but I understand enough I think interested folks might find a little insight.

Before regular traders jumped in a couple of really weird things happened. It's hard to tell if those things happened at once or were a cascade of events. Again, all these things happened before most traders could figure out what the fuck was going on- before the bargain hunters came in.

VIDEO HERE

PB

The video is somewhere here on DU. Williams (who may or may not know anything about the real dealings on Wall Street) was very frightened by the event and said some things NBC anchors don't usually say.

Especially his comments near the end. It went from light-hearted and joking to him conveying a real sense that he was getting 9/11 deja-vu with the events unfolding and their impact on the US (and the world).

PB

Might go and see what he has written about it. You seem to have to register to view this video.

Cramer has no credibility at all. He is nothing but a cheerleader for Wall Street. A monkey throwing darts at a board with company names on it would probably do better than Cramer's record. I loved how Cramer had his head handed to him by Jon Stewart. If you want to see every ounce of credibility being drained out of an overzealous buffoon go to the Daily Show achieves and watch that segment.

Cramer, LOLOLOL! LMFAO! ROFLMAO! LOLOL! Clang, clang, bang, bye bye Cramer!!!

Mm-hmm.

Had a thread earlier because that 'fat finger' report had a whiff of being too co-incidental to it.

However the thread sank like a stone so discussion was practically nil

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8290025

:bounce:

:hi:

:puke:

Billions made on the way down, billions more on the way back up.
You should explain the different trading platforms and WHO actually uses them to make markets. Those are the ones who made a fortune yesterday.

"I think the machines just took over. There’s not a lot of human interaction,” said Charlie Smith, chief investment officer at Fort Pitt Capital Group. "We’ve known that automated trading can run away from you, and I think that’s what we saw happen today.”

:hi:

no Bids....IOW, no liquidity. No one wanted to buy anything and then the computer trading took over.

I wish I had been home and seen this on CNBC.

Our markets are a complete fraud.

Do you really believe that?

it's just gambling. The computer trades, not people.

And after Lehman and Bear Sterns of 2008 and all the money given to the banks...I believe they just took it and went playing in the market. Paulsen getting down on his knees begging for $$$ from Pelosi for all to see. That's how desperate these pathological, evil, greedy 'people' are.

It's corrupt, a fraud....certainly not a 'free' market.

I'm beginning to think that our entire world is a fraud. Look at Greece...all the corruption there has ended up with riots. People played by the rules and got screwed.

The same thing is happening here. States are going to go bankrupt. Cities have gone bankrupt.

It's over. All we're doing is 'Extend and Pretend.' Pretending can go on only so long. The Chinese own us. I'm so glad I'm not young and that I didn't reproduce cuz it's going to get very ugly.

I'm just waiting for another earthquake...but this one will be here.

Sorry to be so ;( I'll go :hide:

just call me 'serf.'

My first thought was that it was a hacker.