Every day, another flash crash

The technology that brought us the Dow 'flash crash' three years ago is causing small-scale panics more often than most investors realize -- and is moving high-profile stocks in ways that can cost you money.

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26Comments
Jul 23, 2013 11:45PM
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I might have to wonder if the whole HFT thing is really a scam designed to drive down prices and then buy-in when prices are low?  Heck, even in day-trading you could make a bundle doing that and still pay short-term capital gains too.

As of today there are accusations that the LIBOR rate has been fixed, that various investment houses and indeed entire countries are guilty of trying to corner metals markets for their own gain, including accusations of dumping huge paper metals contracts to make money on shorts, and a while back junk debt was graded AAA and even bet short by the same investment house too. 

Frankly in this condition the markets should be off-limits to the average investor, since if you are not one of the big-time HFT players who may very well be offshore, you are basically just gambling with your investments there.



Jul 23, 2013 9:46PM
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And the idiotic investment firms are STILL telling the little guy to "invest" in wall street.

 

I got out 13 years ago just before the tech bubble burst [lucky me, as I had closed my 401(k) and was in the process of changing jobs]. Sure I paid taxes and penalties, but it was  HELL of a lot LESS than what I would have lost, if I'd have stayed in the market. Second time, I cashed in my 401 (k) when I retired put it into GLD in 2007--2009, cashed it out, and still made out like a bandit [even after taxes].

If you stay in the market, you'd better be prepared to lose, because this rise is being driven by helicopter ben pumping $85,000,000,000 and MONTH [that's OVER ONE TRILLION DOLLARS a year] and NOT by an improving, booming economy.  The EXACT SAME THING happened from 1927 to 1929, so DON'T tell people it can't happen because it already HAS. Smaller scale, of course, in the 1920s. So, like I said if you can afford to lose the money, fine, go ahead. But DO NOT come crying when you lose it!!

Jul 24, 2013 11:57AM
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"If this sounds to you like some illegal market manipulation is going on, you might be right. But only regulators can trace such trades, and so far at least, they've said nothing about these trades at all."

 

Sounds to me like there is no regulation.  I wouldn't doubt if the "regulators" were in with the schemers. There is no "market."  It's just some big flyers' money tree that they pluck when they feel like it.     

Jul 24, 2013 5:24PM
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The article says, "if the market appears to be fixed, small investors will stay away."

 The market doesn't appear to be fixed the market IS Fixed!! When a large trading company has computers fast enough to step in front of somebody else's trade and cause them to have to pay a higher

price that is a fixed and unfair market.

Jul 24, 2013 10:32AM
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"Machines simply carry out too much of the trading. And they can be programmed to cleverly manipulate the market or simply flee at the first sign of trouble, leaving stocks to tank."  If this does not confirm what all of the naysayers (which includes me) on the current "16,000+ Dow" predictions, I do not know what would.
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All trading should have to go back onto the floor of the exchanges through humans.   Give people their jobs back and slow the market down.   Unfortunately, Wall Street will learn the lesson the hard way.  

Just imagine the amount of money being skimmed off the top by unknown people.  No wonder the Feds had to put trillions back into the economy.  

Jul 23, 2013 7:25PM
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What's good for us is that computers can't yet think for themselves and all I can say about that is think about it.
Jul 24, 2013 9:06AM
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If a small investor has any kind of reasonable buy and hold strategy, why would he care about flash crashes, except possibly to buy on unexpected dips?
Jul 24, 2013 1:45PM
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And I STILL say cash out your 401(k) before the government replaces all of your investment choices with GOVERNMENT BONDS.  The fed has got to sell its bonds to somebody, and when the regular buyers stop buying, guess who the government is going to look at?  Rich people?  Nope, it's going to be the little guy, and the easiest and fastest and cheapest way is to clean out ALL assets in 401 (k)s. Where else is the government going to find money? They've done it in OTHER countries. And besides, WTF are you going to do about it if the government does confiscate your 401(k)?
Jul 24, 2013 10:46AM
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So let's say you owned Anadarko Petroleum...  You bought at 72 and decided to sell at 90, the day of the "flash crash".  I'm wondering, would it be possible for the sell signal from your trading account to go through coincidentally during this "flash crash" and you end up selling at like a buck fifty?
Jul 24, 2013 9:34AM
Jul 24, 2013 2:27AM
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For the small investor like me, I would advise a index fund. I drip monthly into my S&P fund and have more than doubled my investments in the last 4 years. Just roll with the flow, the market will always go up and up till the next recession. Recessions come about every 5 to 7 years, so use common sense to predict the next plunge.
Jul 23, 2013 10:29PM
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In Obamaville, wealth is meant to be shared, and the state will ensure that you share it.

Jul 28, 2013 8:54AM
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Flash crash - a power surge in the electricity infrastructure at the Federal Reserve.  For Obamaville's sake, here's hoping the backup generator keeps the printing press powered up when the circuit breaker pops.
Jul 24, 2013 2:04AM
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This was and google same time of China's telecom syphoning 11% of the internet.  
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