"It's a confidence crisis," said Quincy Krosby, chief market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees about $667 billion. "You've got yourself in a vortex of negativity in Europe. In the U.S., the investigation on yesterday's trading is definitely an overhang. It's a very precarious scenario. The market is waiting for a viable solution."
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNE1LEPTAp1k
http://www.roubini.com/euro-monitor/258851/it_s_not_about_greece_anymore The Greek "rescue" package announced last weekend is dramatic, unprecedented, and far from enough to stabilize the eurozone.
The Greek government and the European Union (EU) leadership, prodded by the International Monetary Fund (IMF), are finally becoming realistic about the dire economic situation in Greece. They have abandoned previous rounds of optimistic forecasts and have now admitted to a profoundly worse situation. This new program calls for a total of 11% of GDP in terms of "fiscal adjustments" (i.e., reduction in the budget deficit; now meaning government spending cuts mostly) in 2010, 4.3% in 2011, and 2% in 2012 and 2013. The total debt to GDP ratio peaks at 149% in 2012-13 before starting a gentle glide path back down to sanity.
"Guys this is probably the craziest I have seen it down here ever." Here it is, memorialized for the generations and away from the now openly ridiculous disinformation propaganda of the mainstream media, just what a full market meltdown panic sounds like: straight from the epicenter, the S&P 500 pits. Luckily open ouctry still exists, if at least for shock value. Click here for a first hand account of the most shocking 15 minutes in recent market history. Fat finger my ass. http://www.zerohedge.com/sites/default/files/Market%20Crash.mp3
http://www.bloomberg.com/apps/news?pid=20601010&sid=aETiygQQ8Y3g
May 6 (Bloomberg) -- Computerized trades sent to electronic networks turned an orderly stock market decline into a rout, according to Larry Leibowitz, the chief operating officer of NYSE Euronext. Nasdaq OMX Group Inc. canceled trades in 286 securities that rose or fell 60 percent or more.
While the first half of the Dow Jones Industrial Average's 998.5-point intraday plunge probably reflected normal trading, the selloff snowballed because of orders sent to venues with no investors willing to match them, Leibowitz said in an interview on Bloomberg Television.
"If you look at the charts you can see fairly clearly where the trades came in," he said from New York. "It's that V-shaped drop where it came down and snapped right back up. You had some very high-cap stocks trading down 50 percent or large percentages in a split-instant because there really was no liquidity in electronic markets."
The selloff briefly erased more than $1 trillion in market value as the Dow average tumbled 9.2 percent, its biggest intraday percentage loss since 1987, before paring the drop. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission are reviewing "unusual trading" that contributed to the plunge.
In one of the most dizzying half-hours in stock market history, the Dow plunged nearly 1,000 points before paring those losses in what possibly could have been a trader error.
According to multiple sources, a trader entered a "b" for billion instead of an "m" for million in a trade possibly involving Procter & Gamble
[PG 60.75 -1.41 (-2.27%) ], a component in the Dow. (CNBC's Jim Cramer noted suspicious price movement in P&G stock on air during the height of the market selloff.
Sources tell CNBC the erroneous trade may have been made at Citigroup
"We, along with the rest of the financial industry, are investigating to find the source of today's market volatility," Citigroup said in a statement. "At this point we have no evidence that Citi was involved in any erroneous transaction."
According to a person familiar with the probe, one focus is on futures contracts tied to the Standard & Poor's 500 stock index, known as E-mini S&P 500 futures, and in particular a two-minute window in which 16 billion of the futures were sold.
Citigroup's total E-mini volume for the entire day was only 9 billion, suggesting that the origin of the trades was elsewhere, according to someone close to Citigroup's own probe of the situation. The E-minis trade on the CME.
In an interview on CNBC, the New York Stock Exchange's CEO, Duncan Niederauer, said there were no bad trades on the Big Board. He also suggested that it may not have been one bank involved in the the bad trade.
The massive selloff, which began shortly after 2 pm ET, amplified concerns about the spreading European debt crisis as the approval of austerity measures by the Greek Parliament sparked renewed rioting in Athens.
"There is simply a growing recognition that Greece has got to default," banking analyst Dick Bove told CNBC.com. "The riots in the streets showed the decision to repay the debt was not going to be made by the people in Germany, France and Switzerland—it's going to be made by people in Greece and they're not going to repay it."
http://www.thestreet.com/story/10749060/1/stock-market-crash-or-trading-error.html?cm_ven=GOOGLEN NEW YORK (TheStreet) -- The Dow Jones Industrial Average plunged on Thursday afternoon, as the week-long selloff in the markets took a turn for the worse and began the talk of a stock market crash.
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http://www.cnbc.com/id/36988229 The Dow plunged Thursday amid buzz in the market that European banks have halted lending.
One trader, on the condition of anonymity, said he heard fixed income desks in Europe shut down early because there was no liquidity — basically European banks are halting lending right now.
"This is similar to what took place pre-Lehman Brothers," the trader said.
http://www.thisismoney.co.uk/news/article.html?in_article_id=503927&in_page_id=2#ixzz0nB24NoHW EU economists have predicted that the UK's budget deficit will remain larger than that of any other European nation this year.
Forecasts from the European Commission (EC) today predict that UK net borrowing will be 12% of output in 2010 - a higher proportion than any other country in the 27-member block, including Greece at 9.3%.
While Greece's deficit is not the highest in the EU, concerns about the government's ability to pay it back are higher because of its high debt levels and weak economy.
Read more: http://www.thisismoney.co.uk/news/article.html?in_article_id=503927&in_page_id=2#ixzz0nB6oxD8d
The situation in Greece has hit a fever pitch and if anyone had any doubt about the seriousness of the matter, the three lives the current riots have claimed thus far are a very grim reminder. Euro remains under increasing pressure and now has the 1.2800 level within striking distance – a dip below there would open up to the Feb/Mar 2009 pivot near 1.2700 on the follow. The only thing stopping the further collapse at the moment seems to be some supranational buying interest (plunge protection?) and the fact that the SNB still has an enormous bid under EUR/CHF.
The market will ignore the goings on in economic data land and keep the Eurozone firmly on the radar in the short-term. The headlines thus far have not been pretty. We heard once again that no bailout plan has been proposed for Spain. Rumors were making the rounds that the debt burdened nation would need at least 280 billion euro – which Prime Minister Zapatero firmly denied. We remember the Lehman gang denying their bank was in trouble as well and everyone remembers what happened there.
In other currencies, USD/JPY made another failed attempt to violate the 95.00 mark topside – printing a 94.99 intraday high for the second consecutive day. Despite the broad strength in the US dollar, the decline in US rates (higher bond prices) is keeping the downside pressure on the pair. The pound continues to hold its own despite a major flight to quality. There is some speculation that the Conservative Party will indeed be able to form a government and thus a "hung" parliament will be avoided. This would ostensibly allow the UK to address it budget issues and help keep the country on its coveted AAA perch.
Australian retail sales are now the focus now in the Asia session. The market is looking for a 0.7% increase in March on the heels of a -1.4% drop the prior month. Given the sharp decline in the previous month, we could see a larger statistical blip in the number. While this would likely see the Australian dollar trade better bid, the broad sell-off in risk (should it continue) would outweigh any benefit from the better result.
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1:30 EDT - Euro is making fresh lows in the NY afternoon, closing in on the Fib. extension at 1.2980. Although it would take a mammoth bounce to damage the bear trend (to 1.3190+), dip-buyers are likely to begin stepping up at the stronger supports below 1.30 flat. MV
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5fO.YEOh3Cs&pos=1 The Standard & Poor's 500 Index slid 2.4 percent at 1:25 p.m. in New York and the Stoxx Europe 600 Index plunged 2.9 percent, leaving it down 0.4 percent this year. The euro weakened below $1.31 for the first time since April 2009. Copper fell to the lowest since February, while oil sank the most in three months as the dollar rose against 14 of 16 major counterparts. The 10-year Treasury yield slid six basis points to 3.62 percent.
Spanish Prime Minister Jose Luis Rodriguez Zapatero said speculation of a bailout for Spain is "complete madness" and the nation has "strong solvency." His remarks came as a 110 billion-euro ($143 billion) rescue package to help Greece avoid default fails to ease concern that swelling sovereign debt will derail the economic recovery.
"Spain and Portugal are both endangered species," said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which manages $9 billion. "The attention could shift to one of those countries. In the U.S., it's no longer news that earnings are better than expected. The stock market has had a great run. I've got a feeling that May is going to be a month of consolidation or even of backing down a little bit."
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http://forexblog.oanda.com/20100430/month-end-needs-overshadow-greece-and-china/ Simply put, today is month-end. Traders all week have been consumed with the peripheral market noise. The Fed, Greece, China, all important, but when it comes to 'lemming' revaluation of portfolios for month-end requirements, logic tends to be thrown out the window with the bath water. Banks models suggest that USD will have to be sold today. With a long week-end in the UK and strong a 'percentage' chance that a Greek bailout could finally be formulated has us asking the question will market participants want to trim their record short EUR positions. The percentage play says yes. Technically, already we have taken out the 1.3280 and the 1.3310 resistance this morning and there is a plethora of individuals wanting to sell EUR's at higher levels making this move drag-on. Their ideal entry level is around the 1.3400 print. The intraday month-end move can be somewhat justified by what portfolio managers have been doing in April. They have been meticulously selling EUR denominated assets' requiring them to repurchase EUR's to re-hedge themselves. Will the SNB allow us to re-enter at better levels?
