Thursday, May 06, 2010

Blame the machines taking over for exposing the fakeness of the markets

Imagine if you were an employee and or a shareholder of Accenture or Sam Adams Beer and you were checking on your retirement or brokerage account between 2:40 PM and 3 PM EST today.

If you were heavy into ACN or SAM you would have at one point witnessed your retirement account go to zero and a leveraged brokerage account go below zero when the share prices of both companies plummeted to 1 cent from 40 and 55 dollars respectively.

"Accenture, Don’t Worry: These Stocks Fell to a Penny, or Less"
By Matt Phillips
"We’ve heard of penny stocks, but Thursday was ridiculous.

We already mentioned how Procter & Gamble plummeted. Accenture ADRs briefly lost all their value Thursday as height of the Flash Crash, falling to one cent.

But they weren’t the only ones. Here are a few other stocks that fell to below one cent briefly Thursday, all of them at 2:48 p.m. ET, when what ever it was that happened, happened.

Here they are, with ticker/name, high, low and last prices, and the percentage drop from the daily high to daily low.

EXC Exelon Corp 43.35 0.0001 41.01 43.35 -100%
EXP Eagle Materials 31.97 0.0001 30.40 31.48 -100%
BRO Brown & Brown 19.86 0.0001 19.03 19.69 -100%
IWA Iowa Telecommunications16.86 0.0001 16.11 16.78 -100%
CNP CenterPoint Energy 14.39 0.0001 13.55 14.39 -100%
SAM Boston Beer 63.17 0.01 55.43 59.44 -100%
CASY Casey’s General Stores 37.86 0.01 36.21 37.76 -100%"

Apparently, trading desks and their computers where still partying like yesterday where Cinqo de Mayo turned into Uno Del Cento.

Not even Charles Ponzi was brazen enough with this type of swindling.

"'Machines took over'

"This is an electronic market where bids can be cancelled at the flick of a button, and everyone cancelled at the same time," said Joe Saluzzi, of Themis Trading in New Jersey.

"We should be down big today, but not 1,000 points. This is an equity market structure issue, there's no major problem going on."

Computer trading is thought to have cranked up the losses, as programmes designed to sell stocks at a specified level came into action when the market started falling.

"I think the machines just took over," said Charlie Smith, chief investment officer at Fort Pitt Capital Group.

"There's not a lot of human interaction. We've known that automated trading can run away from you, and I think that's what we saw happen today."

So, when the bids are automatically canceled, many stocks are technically worth only a penny per share?

How absurd is that? This kind of crap does not even occur at the shadiest craps table let alone legit monetary displacement establishments known as Casinos.

Later on, in a bid to restore what little confidence is left in this shammockery that is the market, Major indexes come out with statements that they will cancel many if not all heavily outside of normal trading range trades:

"Nasdaq cancels trades made over 20-min. period"
cancel all trades made earlier in the day between 2:40 p.m. Eastern time and 3 p.m. Eastern time which were "greater than or less than 60% away from the consolidated last print in that security at (2:40 p.m.) or immediately prior."

What about the poor shmucks that sold in a panic or had low stop losses triggered and were still within the 60% trading ranges?

Some people were wiped out today on what is being called a technical glitch. Tell that to someone who lost all their money in mere minutes if not seconds.

"NYSE: P&G's Plunge Came After Stock Moved Below Circuit Breaker"
By Donna Kardos

NEW YORK (MarketWatch) -- Shares of Procter & Gamble tumbled as much as $22.79, or 37%, at one point Thursday afternoon after sharp declines in the stock market sent the stock below a key circuit breaker level.

Once a stock falls below its circuit breaker, or what the New York Stock Exchange calls "liquidity replenishment points," the price quotes are no longer just electronic and they go into "slow" mode, under which they are no longer protected under Regulation NMS. Reg NMS requires traders to transact on a trading venue at the lowest price rather than on a venue offering the quickest execution or the most reliability.

In turn, when P&G's stock fell below its circuit breaker, other market centers can trade through the quotes. While the designated market maker at the NYSE traded at the $56 level, a trade came through from the Nasdaq exchange at $39.37, according to the NYSE. "

The kind of brazen manipulation seen on the street is now reaching dizzying levels that makes one question reality. Besides the typical fear and greed and general level of theft via the swindling of the longest running confidence game in the world, what the hell is going on? Robbing people blind over weeks and months is not enough now? They have to do it in mere seconds?

This is what Happens when you print trillions out of thin air and give it to banksters to continue the theft of whatever remaining wealth the people have left:

Turning our attention to the currencies market we find similarly disturbing price moves that can leave people potentially wiped out on as little as 1-2% move in the underlying currency knowing full well that typical currency trading is levered 50-1 meaning a 2% move the wrong way in a currency bet will leave you broke in one day.

Imagine if you are a Large Hedge Fund or a Bank that is levered up in borrowing money you do not have only to place it and lever it up again in the currency market only to either watch it make you obscene profits that you will instantly pocket as expedited bonuses or lose everything and go to the tax payers who have not yet participated in riots to overthrow their elected officials.

So this is what we have come to as a Human Civilization.

Unstable people, unstable markets and unstable planetary geology.

It truly is different this time. We were a few badly placed trades away from having a completely worthless market before the end of this month.

It looks like there was going to be selling in May and a permanent going away.

Some third world nations have prior experience in watching their national currencies get the penny stock treatment.

What type of reaction from the 1st world's populace will we get when the exploding toxic asset $hit hits the fan all over?

Add a couple of coronal mass ejections and you have the recipe for a real life Sci Fi movie Cataclysm coming to a street Theater near you.

Rated EX. for Excrementally Xecuted( by a high frequency trading robot nonetheless)

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