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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Flash Stock Market Crash, Biggest Heist in U.S. History

Stock-Markets / Market Manipulation May 16, 2010 - 10:30 AM GMT

By: Submissions

Stock-Markets

Best Financial Markets Analysis ArticleVernontheGerman writes: I wanted to bring to your attention the events that transpired Thursday 6th May between 2:41pm and 2:57pm.

In those 16 min one of the largest heists in American history occurred. It was said that up to one trillion dollars was lost and regained in that time.


What took place was a transferring of wealth from the people to the organizations that conspired this.

So what really happened during those 16 min on Thursday.

The Dow dropped to over 1000 points down.

Some stocks fell over 99%. Stocks that were $65 a share fell to .01!

At the end of the "16 min heist" these stocks were back to their previous levels or more.

Most newspapers are reporting an "error" occurred but no harm no foul as the market quickly resumed back to their "pre crash" levels

But here is what transpired which no one seems to be talking about.

Say you own 1000 shares of ABC in your portfolio and ABC is $65. 1000 x $65 = $65,000

Now say you want to protect yourself in case of a "terrorist act" or if a company issue comes out.

Most prudent investors will place a protective stop as "insurance".

There are several types of stop loss orders but the most common are Stop loss limit or Stop loss market.

The difference is that one will be sold at whatever price the market is when it is triggered (Stop loss market) and the other is a fixed price when it is triggered.

An example would be on the $65 ABC stock, say you placed a protective stop 20% below or $52. As the market fell on Thursday your stop was triggered at $52 and placed a market order. Because the market was falling so fast the order could not find a bid, it could have been $52, $42, $32 or .01 whatever the bid was at. Let's say it hit at $26.75 for a 59% loss.

After the so called 16 min "glitch" ABC was back at $65. No harm no foul right?

Wrong! You lost your shares and "somebody" bought them at $26.75.

It was not available for the average person to buy these shares as most brokerage platforms were frozen during this time including mine. It was like being "handcuffed" during the heist!

So 16 minutes (or less) later the one who purchased these ABC shares made about 145%!

The reason I used the 59% loss example is that the exchanges decided that anything over a 60% loss was too much and reversed trades greater than 60% loss.

This was an orchestrated event as they knew that no circuit breakers were in place after 2:30pm.

Also no news or other events took place during this typically slow time in the market.
http://www.nyse.com/press/circuit_breakers.html

Thank you for reading this.


This heist works only once and probably scared off most anyone left with any skin in the market. What remains at this point are only the machines and real 'investors' are going to dump into treasuries en masse. And who does that benefit? Exactly - the FEDs who needs to raise hundreds of Billions a week at this point.

Finally, there is this 'audit the Fed clause that's getting kicked around and gaining momentum in Congress right now.

I believe this was not only a profitable move but also a warning shot. I think it's pretty easy to see who might have instigated this little maneuver.

Good info on how the FED came about
http://video.google.com/videoplay?docid=-8484911570371055528#

God Bless

~~~~~~~~~~~~~~~~~ _/) ~~~~~~~~~~~~~~~~~~~~

VernontheGerman

"The only thing necessary for the triumph of evil is for good men to do nothing" .


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