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  1. #31
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    [YOUTUBE="http://www.youtube.com/watch?v=J_93dtDMGz8"]Marc Faber on the Dow Plunge[/YOUTUBE]

  2. #32
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    There are claims that the "fat finger" rumor was made up by Wall Street insiders in order to quell fears that a market crash of this magnitude can happen just like that. The average investor is at the mercy of insiders scheming to take a bigger cut of their savings.

  3. #33
    Administrator highlander's Avatar
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    I have two theories

    1) if you find out who got rich, you'll find the culprit -- outright fraud or eastern european organized crime are two guesses

    2) computer programming/logic flaw


    I can easily see the market going down 1000 points in such a short period just based on computer driven trading. What I can't easily understand is perfectly healthy companies suddenly trading for pennies. That seems awfully suspicious.

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  4. #34
    Senior Member Bamboo's Avatar
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    Dear readers,

    I don't know a damn thing about the financial markets, or pretty much anything any of you are talking about.

    How can I learn? Where do I start?

    Sincerely,
    Bamboo
    Last edited by Bamboo; 05-08-2010 at 01:03 PM. Reason: because i actually want responses...
    Don't know how much it'll bend til it breaks.

  5. #35
    Administrator highlander's Avatar
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    Just found this. Theories 2 and 3 are what I was thinking.

    High-frequency trader discusses yesterday's market swerve - May. 7, 2010

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  6. #36
    Administrator highlander's Avatar
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    This is pretty interesting too.

    NYSE CEO explains selloff - Video - Markets

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  7. #37
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    Consider this, the IMF is owned I believe 25% by the US ...just a while ago we had the bailout money for Greece going in, and then the reports of those riots in Greece, which becomes the catalyst of the plunge (which has been up and coming for a while now). No fat fingers, they just didn't get how everything is connected. I wonder how much money the fed pumped into greece.

  8. #38
    Priestess Of Syrinx Katsuni's Avatar
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    For those unsure of stocks and why they exist, or those who consider it to not be producing anything... that's not actually accurate.

    When a company, or a startup, or anything else business related, needs short term finances in order to achieve long term goals, they split the company up a bit into smaller pieces and auction those pieces off a bit at a time. For receiving some degree of power in the company, yeu pay them large sums of monies, which allows them to 'do' stuff with that monies, which makes yeu monies in return.

    This can turn amoral when pleasing the investors becomes the biggest deal, regardless of all else... but basically, without stocks, many startups, and even larger companies, would have no way to survive. If they need finances to do a large bid, they sell some of their company off in the form of stocks; if people notice they're selling the company away, including the power that goes with it... such as a controlling interest... people can begin to make assumptions if the company didn't say anything about doing such.

    If someone starts selling a large amount of stock, it can mean they either want nothing to do with the company anymore for some reason, or that the company may be not worth investing in anymore, or that there's a very big problem with it, such as they just announced they're going bankrupt 5 minutes ago.

    This tends to have a domino effect... when one person who has alot of stock starts selling it off fast, others with the same stock notice this and go waaaaaaaaaaait a moment... crap... I have that stock... and then they bail too, which only furthers the problem.

    So a B for an M can very well make a huge difference like that, because it compounds the problem in on itself, making it worse than it should've been were it an isolated situation.

    Think of it like a spider's web, if yeu push down on any one point, the points connected to it also push down, as do those surrounding those ones, which can shift the whole thing if yeu push far enough on that one point. But without the web, yeu'd not have a net to catch a company if it starts to fall and needs additional finances in short order.

  9. #39
    pathwise dependent FDG's Avatar
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    Katsuni that's not true. Usually startups are NOT quoted on markets, in fact you need to be quite large in order to be quoted. Moreover, most of a company's capital is NOT traded, otherwise companies would change hands extremely quicky, which would be detrimental to their long-term-goal-fulfilling ability.
    ENTj 7-3-8 sx/sp

  10. #40
    Priestess Of Syrinx Katsuni's Avatar
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    Well yeah, obviously, or the 'stocks' would be insane with thousands upon thousands of listings.

    Smaller companies still have shares / stocks though, in many cases, even if they're not listed on the big time of things. Usually they'll go through more direct investors though, such as a larger company, which may just buy out the startup entirely, or purchase controlling interest while it's still cheap enough to get away with doing so.

    Also, generally a company will have a few key shareholders that control most of the power in it and they won't trade that off, since controlling interest is very powerful, and worth more than the individual stocks themselves.

    It wasn't a "zomg this is exactly how it works", it was a broad stroke generalization for people who weren't sure whot stocks even were XD

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