The May 6, 2010 Flash Crash also known as The Crash of 2:45, the 2010 Flash Crash or just simply, the Flash Crash, was a United States stock market crash on May 6, 2010 in which the Dow Jones Industrial Average plunged about 900 points - or about nine percent - only to recover those losses within minutes. It was the second largest point swing, 1,010.14 points, and the biggest one-day point decline, 998.5 points, on an intraday basis in Dow Jones Industrial Average history.[3
the dow ENDED the day down 3% for the day.........there big differance between 9% and 3% during a trading day.
so the stock market going down 10% in one day, is not unrealistic.
Last Edit: Jun 27, 2011 10:42:47 GMT -5 by maui1 - Back to Top
the markets are no longer a forecaster of things to come......it has become a day trader, as the overall trading population has become 'day traders'
everyday, if greece is 'OK' things trade well on the market. if greece is NOT OK, then all the markets trade poorly.
i give the markets credit, in the fact that they know how important, greece is to the overall world fiat money situation, but if they trade the future, as has been the mantra for the market, we would be way past greece and either into a bull or bear market by now.
there is only answer...........and that answer is for the gov't to get out of the way, so a clear picture can be seen. until that happens, no one........not even usa- can tell you the direction........but my guess is that we willl continue going no where until we find a true bottom.
i will find and post what i posted earlier on another thread
Last Edit: Jun 28, 2011 12:43:36 GMT -5 by maui1 - Back to Top
what i would really like to see.........are the numbers of people that the gov't enticed into buying their 1st home, with the home buyers credits of 2008-9-and 10. now all with mortgages which are underwater.
how many of those homes are now 90 days past due and headed to foreclosure.
most, if not all of these loans were done with nothing out of pocket, and continues the backlog in delinquencies, not to mention the hurt it put on new families and our young.
again....the best intentions of our gov't, just hurts us more and more
All these nose dives are due to gross monetary policy errors. Take Black Monday Oct. 19, 1987. Monetary flows (our means-of-payment money X’s the transactions rate of turnover), fell from 16 in AUG to 4 in NOV (the proxy for inflation).
Simultaneously (in the months Sept. & Oct 87 prior to the crash), the rate-of-changes in the proxy for real-gDp declined significantly sharper than in any prior period (since Jan 1918). The proxy declined from 11 in JUL to (-)4 in OCT.
The preceding contractionary monetary policy (FFR & discount rates were both raised .5% on 9/4/1987) – combined with the sharp reduction in short-term money flows, had forced all interest rates up in the short run (at the same time as inflation was subsiding).
30 year conventional mortgages yields had recently risen to 11.26 percent, & moody's 30 year AAA corporate bonds rose to yield 11.06 percent by 10/19/87 (this is the cause in the divergence of in the STOCK/BOND RATIO).....
Bank squaring day was the actual trigger. Banks scrambled for reserves at the end of their 2 week maintenance period - to support their loans-deposits (contemporaneous reserve requirements were in effect exacerbating the shortfall and response time). A significant number of banks, or large banks with large reserve deficiencies, tried to settle their obligations at the last moment, which pricked the bubble.
Written on Mar 30 11:31 am prior to the MAY 6th FLASH CRASH:
"Contrary to economic theory, & Nobel laureate Dr. Milton Friedman, monetary lags are not "long & variable". The lags for monetary flows (MVt), i.e., the proxies for (1) real-growth, and for (2) inflation indices, are historically, always, fixed in length. However the lag for nominal gdp (the FED's target??), varies widely."
Assuming no quick countervailing stimulus:
2010 jan..... 0.54.... 0.25 top feb..... 0.50.... 0.10 mar.... 0.54.... 0.08 apr..... 0.46.... 0.09 top may.... 0.41.... 0.01 stocks fall
Been saying this for the last 6 months. Should see shortly. Stock market makes a double top in Jan & Apr. Then the real-output of final goods & services falls/inverts from (9) to (1) from Apr to May.
Recent history indicates that this will be a marked, short, one month drop, in rate-of-change for real-output (-8). So stocks follow the economy down (with yields moving sympathetically?)" Mar 30 11:31 am
The FED was able to inject liquidity to offset this decline. The FALL in these numbers was later erased.
flow5 Message #10 - 05/03/10 07:30 PM The markets usually turn (pivot) on May 5th (+ or - 1 day).
If gold doesn't fall, then there's a new paradigm. ============ Some people think Feb 27, 2007 started across the ocean. "On Feb. 28, Bernanke told the House Budget Committee he could see no single factor that caused the market's pullback a day earlier". In fact, it was home grown. It was the seventh biggest one-day point drop ever for the Dow. On a percentage basis, the Dow lost about 3.3 percent - its biggest one-day percentage loss since March 2003.
The FED is responsible for almost all of our economic problems.
Are we finally at the bottom, and will prices slowly creep up?
Are there still pockets of trouble where prices are not done going down?
How much inventory is still out there....that needs to be taken off the banks books, and actually sold.
Those are my questions....
Gdgyva, I can not find a source of data to back this up but I understood that the average price of housing increased in value about the same as inflation over the last 100-150 years.. The almost double price in the last 10 years will have to be corrected so what we are seeing is a regression to the means for house prices.. Most of the bank owned real estate is far about that price and no one wants to buy it because of the nature of all the empty home in some areas. I was looking for a house in Kingman,AZ in 2008 and the information about future prices as just mostly price to fantastic. It looks like the areas that had the price drop fast and first are doing the best at recovery.. I know in West Texas prices did not go up a lot before the crash so the bank do not have a lot of houses on their books.. Most loan out here are by FHA as the average price is about $85 to $110/ sq foot. Prices should increase with inflation as you can not build at these prices.. Just my thoughts, Bi Metal Au Pt