Greek Tragedy: Naked Capitalism

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Naked Capitalism: It most certainly is ugly out there.
by Danny Schechter - News Dissector
US stocks did a cliff dive, with the Dow dropping a just shy of 1000 points, and market participants believe it was a single monster seller. The Dow and S&P have rallied hard from there, but are still in seriously negative territory, with the S&P having breached the technically significant level of 1145 decisively.

Here is the time frame, courtesy Scott (from MarketWatch):

2:38 PM: Dow down 360
2:48 PM: Dow down 600
2:51 PM: Dow down 900

Enough with the numbers.

What really happened?
[For complete article reference links, please see source at the News Dissector blog here.]

You are not going to believe it but no one really knows. Blame it on market psychology, which may be a psychiatric condition by now. Here are some of the meditations of Floyd Norris in the New York Times. Just read the lead paragraph and realize we are being dominated by financial maniacs and rationality is out the window.

One part nervous traders
One part Greek crisis and
One part trader error.
Stir in one part central bank complacency.
Bring to boil.

That combination produced one of the wildest days ever in financial markets, with the Dow Jones industrial average, at one point, down almost 1,000 points while the Euro sank to its lowest level in more than a year. There were substantial declines in emerging markets, whose economies had seemed to be booming, and in developed markets, fearful of renewed recessions.

Even though a substantial part of the worst plunge appeared to be linked to a trader error — one $40 stock fell for a time to one penny — prices had fallen around the world even before such mistakes began to happen.

It appears that investors are, again, growing more hesitant to own assets like stocks and bonds, particularly since many now cost far more than they did only a few months ago. Another sharp retrenchment by investors, consumers and businesses could threaten the current global recovery by choking off financing and new orders for companies.”

‘ Here’s part of what the Financial Times has to say:

Europe’s debt crisis sends markets tumbling

Europe’s escalating debt crisis sent share prices tumbling and the euro to 15-month lows on Thursday as investors scrambled for safety and dumped risky assets.

There was confusion on trading floors as the Dow at one point plunged nearly 1,000 points - to below 9,900 - before rebounding sharply.

Amid growing anxiety that Greece could become the first eurozone country to default on its debt repayments despite a €110bn bail-out from its European neighbours and the International Monetary Fund, the S&P 500 index of leading US shares slumped more than 4 per cent by mid-afternoon in New York.


As Wall Street plunged, Angela Merkel, Germany’s chancellor, likened the wider crisis to “a battle of the politicians against the markets” and attacked the role played by credit rating agencies. She declared: “I am determined to win.”

“The speculators are our adversaries. That is why we have to weigh our words more carefully than ever, and stand united,” said

So she, at least, makes clear it is “the speculators” who are driving us down.

Later the FT Had a new word for all this: “SHAMBOLIC”

“A fearful and shambolic session on Wall Street haunted global markets on Friday as investors tried to absorb political reverberations from the streets of Athens to the polling booths of Britain.”

Short View: “Greed, fear and confusion”

HUNG (The Title of A TV Show in America About A Male Prostitute Is Now A Political Condition in the UK)

The FT also reported this morning on the Market’s “WORST FEAR“–A Hung Parliament” and that, my friends, is what they got as the much hyped and commented on “Tory Sweep” did not come to pass. Close but no cigar, as we used to say. The Lib Dems petered and Labor held enough seats to “HANG” the parliament. Now what? Who will prevail in the political food fight/deal making after the election? Stay Tuned. The Debates were a factor but not quite the determining factor. Is there a lesson in this for the US where everyone ASSumes the Tea Party and right will prevail later this year? Talk to me….

ZeroHedge—Greek Bailout Is Really Bailout of French Banks

“Yesterday we pointed out that France was a global top three derisker in sovereign CDS as traders have shifted their worries from the periphery to the core. We have long discussed that the reason for this is that France, not Germany, has the greatest exposure to Greece and the PIIGS. ”

Nasdaq Says Investigating Erroneous Trades After Market Plunge

“Nasdaq OMX Group Inc. said it’s investigating potentially erroneous trades involving multiple securities between 2:40 pm and 3 pm New York time, when the US stock market tumbled.”

Question: Inquiring minds want to know — What role did the Treasury Department’s “Plunge Protection Team” play in manipulating this situation and reversing the drop?

Meanwhile, there is some funny business in Washington with left-right coalition to force a real audit of the fed.


Charge: Bernie Sanders threw out the bathwater the baby and the whole house


Organizer Tiffiney Cheng of breaks the news of the latest disappointment with the workings of “democracy.”

“We had a terrible defeat tonight, when the SAFE banking act was defeated 33 to 61. We could have set a precedent for corporations, we could have set a precedent for government. But, the big banks won. What I love is that we got a vote in Congress, it’s almost a joke. And now, we move out of Congress and move on to sit-ins because we know that it has never been about Congress (

I have been planning to build a virtual wall on of all the people who volunteered time they could have spent enjoying the outdoors, working on other projects, doing nothing. This virtual wall is a small thank you! and I hope it continues to grow with more names.

We are still the only grassroots team that fought so NATIONALLY, know what I mean? Breaking up the banks went, in one year, from not being taken seriously, to being taken so seriously that Dodd rushed it through because he was worried that it might actually pass.

Today, if you can, please do the oldest act in politics: punish and thank.

Please call one of the Senators who voted NO and tell them what you think. And one who voted YES. (I’m picking Kerry for his NO and Shelby for his YES) And then write us back and tell us what you’d like us to do next.

I’m honestly heartbroken tonight–we were so close–but continue to be astonished by all of you.”

On a personal note, I want to express my admiration for Tiffiney and her colleagues and economist Simon Johnson who did so much to push this bill. Unfortunately, the banksters had more power to push back. This is another reason we need to take a longer view and educate the public. I hope my film PLUNDER can be helpful in that process. These issues need to popularized, and fast!  

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