At first, while the regulatory agencies and the United States Congress announced investigations into the crash,[16] no specific reason for the six hundred point plunge was identified. Investigators focused on a number of possible causes, including a confluence of computer-automated trades, or possibly an error by human traders. By the first weekend, regulators had discounted the possibility of trader error and focused on automated trades conducted on exchanges other than the NYSE. However, CME Group, a large futures exchange, stated that, insofar as stock index futures traded on CME Group were concerned, its investigation found no evidence for this or that high-frequency trading played a role, and in fact concluded that automated trading had contributed to market stability during the period of the crash.[17] Others speculate that an intermarket sweep order may have played a role in triggering the crash.[18]
The level of panic that we witnessed on Wall Street on Wednesday was breathtaking.  After a promising start to the day, the Dow Jones Industrial Average started plunging, and at the close it was down another 608 points.  Since peaking at 26,951.81 on October 3rd, the Dow has now fallen 2,368 points, and all of the gains for 2018 have been completely wiped out.  But things are even worse when we look at the Nasdaq.  The percentage decline for the Nasdaq almost doubled the Dow’s stunning plunge on Wednesday, and it has now officially entered correction territory.  To say that it was a “bloodbath” for tech stocks on Wednesday would be a major understatement.  Several big name tech stocks were in free fall mode as panic swept through the marketplace like wildfire.  As I noted the other day, October 2018 looks a whole lot like October 2008, and many believe that the worst is yet to come.
Spread your risk. Having a well-designed mix of investments is a great idea anytime, but especially so in a down market. That's because you don't take a pounding by having all your eggs in one potentially leaky basket. Studies show that holding a judicious mix of growth and value stocks, possibly in international as well as U.S. companies, and some bonds and cash investments too, is a great way to minimize investment loss.
Sixth, Europe, too, will experience slower growth, owing to monetary-policy tightening and trade frictions. Moreover, populist policies in countries such as Italy may lead to an unsustainable debt dynamic within the eurozone. The still-unresolved “doom loop” between governments and banks holding public debt will amplify the existential problems of an incomplete monetary union with inadequate risk-sharing. Under these conditions, another global downturn could prompt Italy and other countries to exit the eurozone altogether.
Till August 1987 markets were favorable. In fact, as per the records of 25th August 1987, the Dow was of a 2722.44, which was almost a record hike. But after that, it only started to depreciate. An 8.4% drop was recorded on September 22nd, 1987. But then there was an increase of Dow again. A 5.9% increase was recorded on the 2nd of October 1987. But that was only for the time being. Once again the Dow started to fall and by October 19th the market had badly crashed; so much so that the Dow had dropped to 508. That would be almost a 22.6% drop on that single day. And if the drop had to be measured from the peak on 25th August, it was a whopping 36.7%. October 19th has since been referred to as the Black Monday.
Though the Trump administration has looked to tariffs to help balance out a huge trade deficit with China, these added costs on aluminum, steel, and potentially other Chinese goods, could come back to haunt businesses and U.S. consumers. As material costs rise as a result of tariffs, businesses have little choice but to pass along these higher costs to consumers. That will likely result in less consumption, and an eventual pullback in spending from businesses, which may lead to a borderline recession.
As an investment banker who buys blocks of mortgages around America this is an important subject as to whether the value of my collateral will deteriorate. Talbott does a good job presenting his case that there is a relationship between household income and housing prices. His point is well taken that low interest rates have fueled this boom and that when rates rise, housing prices will have to come down. So, from the perspective of his thesis, I found this to be well written and well documented even if I agree there is a risk but do not believe that it will be significant.
The domestic equity markets started on a positive note on Friday following lower crude oil prices, a sharp recovery in Indian rupee value vs US dollar with Yes Bank shares plunging 34%. Yes Bank shares collapsed as much as 34% in the morning deals after India’s fifth-largest private sector lender informed that Rana Kapoor, MD & CEO, Yes Bank may continue as the MD & CEO till 31 January 2019. The benchmark Sensex rallied as much as 368.02 points to a day’s high of 37,489.24 while NSE Nifty recoiled to a day’s top of 11,346.80.

One factor which supports the argument against a property price crash is ongoing strong population growth. Over the year to the March quarter it remained high at 1.6%, which is at the top end of developed countries. As can be seen in the next chart, net overseas migration has become an increasingly important driver of population growth in recent years.

Market collapses can really hurt older investors. A stock market collapse can inflict damage across the board, demographically, but the impact on older Americans is especially onerous. Think of a 67-year-old retiree whose assets are largely tied up in the stock market: The value of those assets plummets after a market crash. While a 25-year-old has plenty of time to rebuild portfolio assets, a 67-year-old does not, and doesn't have the needed income any longer to even play "catch up" in the stock market.


The internal reasons included innovations with index futures and portfolio insurance. I've seen accounts that maybe roughly half the trading on that day was a small number of institutions with portfolio insurance. Big guys were dumping their stock. Also, the futures market in Chicago was even lower than the stock market, and people tried to arbitrage that. The proper strategy was to buy futures in Chicago and sell in the New York cash market. It made it hard – the portfolio insurance people were also trying to sell their stock at the same time.[14]
At first, while the regulatory agencies and the United States Congress announced investigations into the crash,[16] no specific reason for the six hundred point plunge was identified. Investigators focused on a number of possible causes, including a confluence of computer-automated trades, or possibly an error by human traders. By the first weekend, regulators had discounted the possibility of trader error and focused on automated trades conducted on exchanges other than the NYSE. However, CME Group, a large futures exchange, stated that, insofar as stock index futures traded on CME Group were concerned, its investigation found no evidence for this or that high-frequency trading played a role, and in fact concluded that automated trading had contributed to market stability during the period of the crash.[17] Others speculate that an intermarket sweep order may have played a role in triggering the crash.[18]
The absurd result of valuable stocks being executed for a penny likely was attributable to the use of a practice called "stub quoting." When a market order is submitted for a stock, if available liquidity has already been taken out, the market order will seek the next available liquidity, regardless of price. When a market maker’s liquidity has been exhausted, or if it is unwilling to provide liquidity, it may at that time submit what is called a stub quote—for example, an offer to buy a given stock at a penny. A stub quote is essentially a place holder quote because that quote would never—it is thought—be reached. When a market order is seeking liquidity and the only liquidity available is a penny-priced stub quote, the market order, by its terms, will execute against the stub quote. In this respect, automated trading systems will follow their coded logic regardless of outcome, while human involvement likely would have prevented these orders from executing at absurd prices. As noted below, we are reviewing the practice of displaying stub quotes that are never intended to be executed.
The loopholes in the accounts of the companies are believed to be a major reason for the crash. The companies weren’t honest about their dealings in the company accounts and hid debts which affected the market. Therefore the rule of CEO and CFO accountability was laid. Under these regulations, all the statements needed to be duly signed by the CEOs or CFOs of the respective companies. That way frauds and loopholes could easily be made out. Also, the prosecution was made stricter. The penalties that would result from frauds or any illegal activity in trading were increased. This was meant to control the losses that the market was suffering.

The housing market will not grow forever, but it is hard to say when things will change. As Dennis said, real estate trends are very different in various parts of the country. Some parts of the country may see increasing prices for a few more years, while others may see a drop right away. I agree with Dennis that a housing crash like we saw in the mid-2000s is not coming anytime soon. I could see prices steadying out due to the affordability problems in some areas, especially if interest rates rise. Those two factors will not cause a crash when so few homes are being built and the quality of new loans is so high.
Agreed, the timing is huge, I know a few people who sold in 2007-2008 in Vancouver and, well, it’s 5 years later and now they’re looking at probably another 5 at least if the market does crash. They thought a crash was coming and were wringing their hands when GFC hit. Then the credit taps were turned to 11 and prices in parts of Vancouver are way up from then, including properties these people were eyeing on MLS. Now it’s another few hundred K on top at least. Ouch.
Using a simple options calculator (like that available at options-price.com) we can calculate how our put options purchased in the example above would perform after a 20% decline in the span of just a month. In this hypothetical example, SPY drops to 175 and implied volatility rises to 55 (for this example I took the VIX level of 45 in October 2002, as suggested by Spitznagel, and added 10 points for 10% out-of-the-money put options). Our puts have gone from $9 each in value to $328.10. We own 55 of them so they are now worth just over $18,000 in total.
I am very frightened. This past June, I allowed a financial advisor to convince me that my portfolio made up of primarily stocks was risky for a retiree. I have been retired since 2005 and had held the same stocks since then. These stocks included 2 Canadian banks, BCE, TransAlta, and Emera. I was receiving dividends o $4,800 per year and all the stocks consistently raised their dividends. The financial advisor put me in2 costly mutual funds which proceeded to lose me $ 1800 within days and also swallowed up up my incoming dividends from the former portfolio. By the time I was down $6,000 I panicked and pulled out of the mutual funds. And! This was in 2017. What I have left and what I thought would carry me through my retirement is now in a money market making very little and I am terrified daily as to reinvesting it.

By that year, Gutman wrote, "Video games were officially dead and computers were hot". He renamed his magazine Computer Games in October 1983, but "I noticed that the word games became a dirty word in the press. We started replacing it with simulations as often as possible". Soon "The computer slump began ... Suddenly, everyone was saying that the home computer was a fad, just another hula hoop". Computer Games published its last issue in late 1984.[13] In 1988, Computer Gaming World founder Russell Sipe noted that "the arcade game crash of 1984 took down the majority of the computer game magazines with it." He stated that, by "the winter of 1984, only a few computer game magazines remained," and by the summer of 1985, Computer Gaming World "was the only 4-color computer game magazine left."[20]


In a 2011 article that appeared on the Wall Street Journal on the eve of the anniversary of the 2010 "flash crash", it was reported that high-frequency traders were then less active in the stock market. Another article in the journal said trades by high-frequency traders had decreased to 53% of stock-market trading volume, from 61% in 2009.[81] Former Delaware senator Edward E. Kaufman and Michigan senator Carl Levin published a 2011 op-ed in The New York Times a year after the Flash Crash, sharply critical of what they perceived to be the SEC's apparent lack of action to prevent a recurrence.[82]
Umm sorry, but you know nothing relevant about the 2007-08 financial collapse and should do some research before claiming you know anything about financial theory. I agree with you that some interest is fine and fair, but Calvin is quite correct that in this case is was simple greed, gambling and dishonest on the part of your “bankers” that’s to blame. The subprime mortgage risk is not what caused the collapse in 2007-2008. What happened here is that you “bankers” even though they knew that interest rates were only in the 6% percent range, and thus grouping the mortgages together and selling them as investment could only net a profit in that same range (6%) instead claimed that they were worth 10-100 times what they were and sold them as such. Normal (not subprime mortgages) were regulated by law so that your cheating bankers(to be fair this was not all bankers, only dishonest ones) were not allowed to claim that they are worth anything more than the rate of return which is obviously the truthful and correct rate maximum that an investor would see. Sub-prime mortgages the other hand, were not regulated by law and nothing prevented your “bankers” falsely claiming and selling the mortgates as an investement with an expected derivative return many times higher than could ever be possible with the real interest rates.
I don’t even know how many records I own, but it’s in the thousands. I have records, tapes, CDs, and computer files going all the way back to the 1880s. I even have one recording from 1869. A scientist was studying sound waves and recorded a woman singing “Clare De Lune.” He recorded it as wavy lines on a soot-covered paper. Someone recently scanned it and converted it back into sound. It doesn’t sound very good, but it’s amazing that you could retrieve sound from marks on a sooty piece of paper.
When you think of oil production, the Middle East or OPEC is probably what comes to mind. But substantial shale finds in the United States in recent decades have pushed the nation the No. 3 spot in terms of daily production as of 2016, according to data from the U.S. Energy Information Administration. At 8.88 million barrels of oil production per day, the U.S. is responsible for more than 10% of global production. 

The Indian rupee jumped as much as 55 paise against the US dollar in the opening trade at the interbank foreign exchange market on Friday. The rupee regained a level of 71.8288, up 55 paise per unit US dollar, the Bloomberg data showed. India's government is planning to ask state oil firms to lock in their crude futures purchase prices, Reuters reported citing an unidentified government source, anticipating a spike when US sanctions on Iran snap back again in November. The move would be another step to tackle a slide in the rupee, as oil prices are putting pressure on India, the report added. 
Though the Trump administration has looked to tariffs to help balance out a huge trade deficit with China, these added costs on aluminum, steel, and potentially other Chinese goods, could come back to haunt businesses and U.S. consumers. As material costs rise as a result of tariffs, businesses have little choice but to pass along these higher costs to consumers. That will likely result in less consumption, and an eventual pullback in spending from businesses, which may lead to a borderline recession.
Hi Tamara, a vacation rental property owner in San Diego County I knew did well during the recession. Prices are much higher now and you’ll need to be a very good rental property manager. Take a look at the San Diego Housing market report if you didn’t read it. San Diego’s fantastic and the shortage there will never ease. My opinion is that you need to be a good marketer to keep it rented. If you build up a good database of returning renters, you should be okay. With VRBO and Airbnb, you’ll have extra reach too. With Trump bringing jobs and investment money back home, I can’t see a recession, just volatility and maybe some trade wars!
Job one in the midst of a stock market crash is to be aware of your own exposure to the market. Are you highly leveraged as a margin investor? Is your investment portfolio overly weighted with riskier growth stocks or other more-speculative stocks? Has your personal financial situation changed significantly over the course of a 24-hour market collapse?
In a 2011 article that appeared on the Wall Street Journal on the eve of the anniversary of the 2010 "flash crash", it was reported that high-frequency traders were then less active in the stock market. Another article in the journal said trades by high-frequency traders had decreased to 53% of stock-market trading volume, from 61% in 2009.[81] Former Delaware senator Edward E. Kaufman and Michigan senator Carl Levin published a 2011 op-ed in The New York Times a year after the Flash Crash, sharply critical of what they perceived to be the SEC's apparent lack of action to prevent a recurrence.[82]
On October 29, 1929, Black Tuesday hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression (1929-39), the deepest and longest-lasting economic downturn in the history of the Western industrialized world up to that time.
Hi Mike, I would say yes, see the https://gordcollins.com/real-estate/mississauga-real-estate-forecast/ post on those trends. Milton has no room to grow with everyone wanting to live there. They’ll get the free trade deal resolved and Doug Fords new plan to expand northward into farm country will stimulate the economy like crazy. Detached in Mississauga/Milton are rare finds so not surprising Milton has the 3rd lowest days on market in the GTA. Once Ford is in, the prices will rise because he probably will turn the economy on.
And from this telling graphic above, the shocking rise and fall of detached home prices tells us something is wrong with the Toronto real estate market. Could a Toronto housing crash occur? The renegotiation of the NAFTA deal may be the factor that starts the slide.  President Trump’s goal is US jobs and economic health and he’s already stated he wants a better deal with Canada. It makes sense that he would want auto makers and parts manufacturing to be done in the US. The Canadian dairy and lumber industries are just a distraction.
In March 2017, William Poole, a senior fellow at the Cato Institute, warned of another subprime crisis. He warned that 35 percent of Fannie Mae's loans required mortgage insurance. That's about the level in 2006. In some ways, these loans are worse. Fannie and Freddie lowered their definition of subprime from 660 to 620. The banks are no longer calling borrowers with scores between 620 and 660 subprime. Poole was the head of the Federal Reserve Bank of Kansas who warned of the subprime crisis in 2005.
With the bankers' financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to one that had ended the Panic of 1907. It succeeded in halting the slide. The Dow Jones Industrial Average recovered, closing with it down only 6.38 points for the day. The rally continued on Friday, October 25, and the half day session on Saturday the 26th but, unlike 1907, the respite was only temporary.
Fourth, other US policies will continue to add stagflationary pressure, prompting the Fed to raise interest rates higher still. The administration is restricting inward/outward investment and technology transfers, which will disrupt supply chains. It is restricting the immigrants who are needed to maintain growth as the US population ages. It is discouraging investments in the green economy. And it has no infrastructure policy to address supply-side bottlenecks.
During the mid- to late 1920s, the stock market in the United States underwent rapid expansion. It continued for the first six months following President Herbert Hoover’s inauguration in January 1929. The prices of stocks soared to fantastic heights in the great “Hoover bull market,” and the public, from banking and industrial magnates to chauffeurs and cooks, rushed to brokers to invest their surplus or their savings in securities, which they could sell at a profit. Billions of dollars were drawn from the banks into Wall Street for brokers’ loans to carry margin accounts. The spectacles of the South Sea Bubble and the Mississippi Bubble had returned. People sold their Liberty Bonds and mortgaged their homes to pour their cash into the stock market. In the midsummer of 1929 some 300 million shares of stock were being carried on margin, pushing the Dow Jones Industrial Average to a peak of 381 points in September. Any warnings of the precarious foundations of this financial house of cards went unheeded.
In addition, the rapid growth of the video game industry led to an increased demand for video games, but which the manufacturers over-projected. An analyst for Goldman Sachs had stated in 1983 that the demand for video games was up 100% from 1982, but the manufacturing output increased by 175%, creating a surplus in the market.[4] Raymond Kassar, the CEO of Atari, had recognized in 1982 that there would become a point of saturation for the industry, but did not expect this to occur until about half of American households had a video game console; at the time, only about 15 million machines had been sold, far below this expected point.[4]
There is no numerically specific definition of a stock market crash but the term commonly applies to steep double-digit percentage losses in a stock market index over a period of several days. Crashes are often distinguished from bear markets by panic selling and abrupt, dramatic price declines. Bear markets are periods of declining stock market prices that are measured in months or years. Crashes are often associated with bear markets, however, they do not necessarily go hand in hand. The crash of 1987, for example, did not lead to a bear market. Likewise, the Japanese bear market of the 1990s occurred over several years without any notable crashes.
In the recent statement, the head of research at Fundstrat Global Advisors pointed out two major types of crypto players — those who are “using it and have wallets in crypto,” and those who belong to a speculative side of the market. According to Lee, those two sides of the crypto community should find a way for “sort of interacting with each other” for crypto investors not to get burnt by crashes like this.
One of the reasons Warren Buffett’s predictions tend to have more weight is that they’re less based on outright fortune telling and more on a series of clear indicators. In other words, the Warren Buffett Indicator works like a barometer. It does not predict rain, per se, but it does tell you whether you should look for an umbrella in the closet to keep it handy for the next day.

What is commercial paper ? Commercial paper is a money - market security issued by large corporations to obtain funds to meet short-term debt obligations and is backed only by an issuing bank or company promise to pay the face amount on maturity date specified on the note . Since it is not backed by collateral , only firm with excellent credit ratings from a recognised credit rating agency will be able to sell their commercial papers at reasonable price .Commercial paper is usually sold at a discount from face value , and generally carries lower interest repayment rates than bonds due to shorter maturities of commercial paper .
Until 1982, few third-party console games existed other than Activision's. Imagic and Games by Apollo demonstrated their own 2600 cartridges in January 1982, and Coleco announced several 2600 and Intellivision games. Parker Brothers, CBS Video Games, and Mattel also announced 2600 cartridges at the February Toy Fair, and Coleco announced the ColecoVision. At the Summer 1982 Consumer Electronics Show, 17 companies including MCA Inc. and Fox Video Games announced 90 new Atari games.[25] By 1983, an estimated 100 companies were vying to get a foothold in the video game market.[4]
We continue to see the trend in shares remaining up, as global growth remains solid helping drive good earnings growth and monetary policy remains easy. However, the risk of a correction over the next two months still remains significant given the threats around trade, emerging market contagion, ongoing Fed rate hikes, the Mueller inquiry in the US, the US mid-term elections and Italian budget negotiations. Property price weakness and approaching election uncertainty add to the risks around the Australian share market.
Markets can also be stabilized by large entities purchasing massive quantities of stocks, essentially setting an example for individual traders and curbing panic selling. However, these methods are not only unproven, they may not be effective. In one famous example, the Panic of 1907, a 50 percent drop in stocks in New York set off a financial panic that threatened to bring down the financial system. J. P. Morgan, the famous financier and investor, convinced New York bankers to step in and use their personal and institutional capital to shore up markets.
In April 2015, Navinder Singh Sarao, a London-based point-and-click trader,[62] was arrested for his alleged role in the flash crash. According to criminal charges brought by the United States Department of Justice, Sarao allegedly used an automated program to generate large sell orders, pushing down prices, which he then cancelled to buy at the lower market prices. The Commodity Futures Trading Commission filed civil charges against Sarao.[63][64] In August 2015, Sarao was released on a £50,000 bail with a full extradition hearing scheduled for September with the US Department of Justice. Sarao and his company, Nav Sarao Futures Limited, allegedly made more than $40 million in profit from trading during the Flash Crash.[65]
In 1987, you had an economy that was slowing from a rapid recovery, Treasury yields that were huge and falling, and an inflation rate that was running around 4%. Today, you have an economy that is just starting to boom, Treasury yields that are low and rising, and an inflation rate running around 2%. In other words, the economic conditions are starkly different.
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