Comments on: A Closer Look at the 1,000 Point Dow Plunge http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 21:38:31 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: 5 Investing Challenges for the Next Decade | Balance Junkie http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-303787 5 Investing Challenges for the Next Decade | Balance Junkie Thu, 20 May 2010 09:38:35 +0000 http://www.ritholtz.com/blog/?p=55911#comment-303787 [...] phenomenon may have played at least a partial role in the flash crash of May 6, 2010. (Here’s A Closer Look at the 1000 Point Dow Plunge if you’re interested in the nitty [...] [...] phenomenon may have played at least a partial role in the flash crash of May 6, 2010. (Here’s A Closer Look at the 1000 Point Dow Plunge if you’re interested in the nitty [...]

]]> By: Market Plunge No Boating Accident - MarketBeat - WSJ http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-298847 Market Plunge No Boating Accident - MarketBeat - WSJ Thu, 13 May 2010 12:56:41 +0000 http://www.ritholtz.com/blog/?p=55911#comment-298847 [...] [...] [...] [...]

]]> By: Market Talk » Blog Archive » That Was no Boating Accident http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-298583 Market Talk » Blog Archive » That Was no Boating Accident Thu, 13 May 2010 03:43:35 +0000 http://www.ritholtz.com/blog/?p=55911#comment-298583 [...] now works; Chris Whalen at Institutional Risk Analysis comes to mind, a trader Barry Ritholtz cited at The Big Picture (”that is what we like to call trading.”) Another is the anonymous [...] [...] now works; Chris Whalen at Institutional Risk Analysis comes to mind, a trader Barry Ritholtz cited at The Big Picture (”that is what we like to call trading.”) Another is the anonymous [...]

]]> By: I’m Sorry, Dave. I’m Afraid I Can’t Do That. « Baskerville Capital http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-297944 I’m Sorry, Dave. I’m Afraid I Can’t Do That. « Baskerville Capital Wed, 12 May 2010 13:18:38 +0000 http://www.ritholtz.com/blog/?p=55911#comment-297944 [...] sudden drop on May 6th is finally beginning.  Amidst the confusion, I came across the following description on Barry Ritholtz’s blog: [I]t was not a sudden, random surge of volume from a fat finger [...] [...] sudden drop on May 6th is finally beginning.  Amidst the confusion, I came across the following description on Barry Ritholtz’s blog: [I]t was not a sudden, random surge of volume from a fat finger [...]

]]> By: mosheobrien http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-297822 mosheobrien Wed, 12 May 2010 10:01:43 +0000 http://www.ritholtz.com/blog/?p=55911#comment-297822 After this panic selling on Thursday, the market will continue to go higher. Time to buy more! After this panic selling on Thursday, the market will continue to go higher. Time to buy more!

]]> By: Nic http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-297765 Nic Wed, 12 May 2010 08:06:11 +0000 http://www.ritholtz.com/blog/?p=55911#comment-297765 http://dealbook.blogs.nytimes.com/2010/05/12/market-inquiry-focuses-on-one-trader/?src=twt&twt=nytimesdealbook They are seriously focusing on one trader because he "only sold and didn't buy". What a joke. This market is still humans and when you switch the machines off herd behaviour happens. In October 1929 on the Thursday before Black Monday the market fell hard and bounced and everyone blamed "excessive leverage". There is always something to blame but it still happened. http://dealbook.blogs.nytimes.com/2010/05/12/market-inquiry-focuses-on-one-trader/?src=twt&twt=nytimesdealbook

They are seriously focusing on one trader because he “only sold and didn’t buy”. What a joke. This market is still humans and when you switch the machines off herd behaviour happens.
In October 1929 on the Thursday before Black Monday the market fell hard and bounced and everyone blamed “excessive leverage”. There is always something to blame but it still happened.

]]> By: Pir2 http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-297579 Pir2 Wed, 12 May 2010 03:18:27 +0000 http://www.ritholtz.com/blog/?p=55911#comment-297579 i have to disagree, contagion from Greece was already in the basket. Europe will have never left Greece default. This not what was new this week. i say this is link to the Time Square failure. This is funny that aphatradingsystem which want to be the next TSX was down for the week due to some trouble. any other systems down for that specific week? i know this is so into the conspiracy theory but if you think you can replicate this dive then why would you not think that somebody already though about making $ about it. one will be to check who made $ during that time, short and long and see if they were legitimate. i have to disagree, contagion from Greece was already in the basket. Europe will have never left Greece default. This not what was new this week. i say this is link to the Time Square failure. This is funny that aphatradingsystem which want to be the next TSX was down for the week due to some trouble. any other systems down for that specific week?

i know this is so into the conspiracy theory but if you think you can replicate this dive then why would you not think that somebody already though about making $ about it. one will be to check who made $ during that time, short and long and see if they were legitimate.

]]> By: rktbrkr http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-297571 rktbrkr Wed, 12 May 2010 03:07:02 +0000 http://www.ritholtz.com/blog/?p=55911#comment-297571 Robespierre, From John Mauldin August 2009 Spain is set for a long, painful deflation that will manifest itself via a very high unemployment level for an industrialized economy, a real estate collapse and general banking insolvencies. Spain had the mother of all housing bubbles. To put things in perspective, Spain now has as many unsold homes as the US, even though the US is about six times bigger. Spain is roughly 10% of the EU GDP, yet it accounted for 30% of all new homes built since 2000 in the EU. Most of the new homes were financed with capital from abroad, so Spain's housing crisis is closely tied in with a financing crisis. The impact on the banking sector will be severe. Consider this: the value of outstanding loans to Spanish developers has gone from just €33.5 billion in 2000 to €318 billion in 2008, a rise of 850% in 8 years. If you add in construction sector debts, the overall value of outstanding loans to developers and construction companies rises to €470 billion. That's almost 50% of Spanish GDP. Most of these loans will go bad. Spanish banks, in our view, are now facing a very bleak outlook. Spain's unemployment rate reached over 17%; there are now four million unemployed Spaniards and over one million families with not a single person employed in the family. Robespierre, From John Mauldin August 2009
Spain is set for a long, painful deflation that will manifest itself via a very high unemployment level for an industrialized economy, a real estate collapse and general banking insolvencies.

Spain had the mother of all housing bubbles. To put things in perspective, Spain now has as many unsold homes as the US, even though the US is about six times bigger. Spain is roughly 10% of the EU GDP, yet it accounted for 30% of all new homes built since 2000 in the EU. Most of the new homes were financed with capital from abroad, so Spain’s housing crisis is closely tied in with a financing crisis.

The impact on the banking sector will be severe. Consider this: the value of outstanding loans to Spanish developers has gone from just €33.5 billion in 2000 to €318 billion in 2008, a rise of 850% in 8 years. If you add in construction sector debts, the overall value of outstanding loans to developers and construction companies rises to €470 billion. That’s almost 50% of Spanish GDP. Most of these loans will go bad.

Spanish banks, in our view, are now facing a very bleak outlook. Spain’s unemployment rate reached over 17%; there are now four million unemployed Spaniards and over one million families with not a single person employed in the family.

]]> By: andytsgang.blogspot.com http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-297478 andytsgang.blogspot.com Wed, 12 May 2010 00:49:23 +0000 http://www.ritholtz.com/blog/?p=55911#comment-297478 BR, Great summary. My question is that can an old style specialist system work in today’s electronic markets? Nasdaq has survived without a true specialist system, but the old system where the specialist had a mandate to buy seems like it is needed these days. Without some type of assurances in the market place that a person can’t go to the bathroom while the markets are open for fear of a market meltdown, how are they going to bring confidence back to the system? Is this the new paradigm for the markets? I haven’t seen too many people freaking out about having a lack of confidence in our markets but I was shaken to the core seeing the volatility. And we thought real estate was a sure losing proposition. BR,

Great summary. My question is that can an old style specialist system work in today’s electronic markets? Nasdaq has survived without a true specialist system, but the old system where the specialist had a mandate to buy seems like it is needed these days.

Without some type of assurances in the market place that a person can’t go to the bathroom while the markets are open for fear of a market meltdown, how are they going to bring confidence back to the system? Is this the new paradigm for the markets?

I haven’t seen too many people freaking out about having a lack of confidence in our markets but I was shaken to the core seeing the volatility. And we thought real estate was a sure losing proposition.

]]> By: WolfStreet http://www.ritholtz.com/blog/2010/05/a-closer-look-at-the-1000-dow-plunge/comment-page-1/#comment-297436 WolfStreet Wed, 12 May 2010 00:15:02 +0000 http://www.ritholtz.com/blog/?p=55911#comment-297436 OR : "the harder they come the harder they'll fall". sounds better with some music though... OR : “the harder they come the harder they’ll fall”.

sounds better with some music though…

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