Wall Street Caught in a Perfect Storm, or Not
October 20th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
When you start a fire, be to windward of it. Do not attack from the leeward.
—Sun Tzu, The Art of War
Look, 367 points is fly fart antics at these levels. On a percentage basis, the Dow only lost 2.64%. I don’t know what these reporters are up to by making 1987 crash analogies here, but what they’ve written is misleading. Short squeeze setup, maybe???
On October 19, 1987, the Dow Jones Industrial Average lost 22.6%! Now that was a crash.
Friday’s move: Fly fart. Also, re: options expiration, see Insider Crimes, Funny Money and Options Rackets. Options expiration is always a time of BIG MONEY ripoffs. Forget about the losses that the media is talking about. The question is: Who had the deep out-of-the-money Dow Diamond Puts that were going to expire worthless, but didn’t? That’s the real story here. And, of course, that’s not a topic for polite conversation.
So, who had those puts? I don’t know, but it would be the same people who sold the Dow futures, taking the whole show down.
That was no crash. That was business as usual, options expiration style.
Besides, we’ve got the Plunge Protection Team on the job.
What could possibly go wrong? 😉
For now, I’m calling simple sell program manipulation to get the juice on the Diamond put options.
Via: Telegraph:
The Dow Jones plunged almost 370 points in a perfect storm of surging oil costs, a sliding dollar, and fresh fears of paralysis in the credit markets.
Twenty years to the day since Black Monday, when the Dow slumped 508 points in a day, Wall Street was rocked by rumours of defaults and heightened fears that the US economy may be heading for a recession.
There were frantic scenes in the last hour of trading on Wall Street yesterday, as traders on the floor of the New York Stock Exchange fell over one another to place sell orders in all of America’s biggest companies.
The Dow finally closed down 366.94 points at 13522.02 recording its biggest one-day loss since August 9, the start of this summer’s credit crisis.
In total, 1.75bn shares changed hands on the NYSE, 1.65bn were sell orders. The panic selling was compounded by the unwinding of options.
Research Credit: PD
the MSM is such a barrel of laughs, eh?
parallel universe, anyone?
367 dow points in 2007 is soooooo related to 508 points in 1987. of course, it’s so obvious! y’know, 2% is roughly equivalent to 22%, right? they both start with 2s, dummies!!! HAHAHAHAHAHAHAHAHAHa
the news, presented in shining 1984 styleeee. up is down, black is white, war is peace, freedom is slavery. bush is president (woops!)
“recording its biggest one-day loss since August 9”
OMG! biggest loss in 2 and a half months!
as Kevin implies, it’s all about creating distractions while the real action goes on undisturbed.