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Friday, October 1, 2010

CBC News - Money - Single trader caused 'flash crash': SEC

CBC News - Money - Single trader caused 'flash crash': SEC

To read a news article which discusses the fact that the actions of single trader caused the Dow Jones industrial average to drop nearly 1,000 points in less than a half-hour, please click on the link above.

All of us who have investments are wondering how this could happen, and of course we are also interested in finding out what changes are going to be implemented (if any) to prevent this circumstance from happening again!

After doing some research online I have discovered the following:


"The Securities and Exchange Commission and Commodity Futures Trading Commission released a long-awaited report that comes in the wake of the Dow Jones Industrial Average’s /quotes/comstock/10w!i:dji/delayed (DJIA 10,830, +41.93, +0.39%) sudden drop of nearly 1,000 points on May 6. At one point that afternoon, the Dow dropped 481 points in six minutes and then had recovered 502 points just 10 minutes later"

"Specifically, the report points to a large fundamental trader, which it doesn’t identify, that executed a large sell order -- valued at roughly $4.1 billion -- using an automated execution algorithm at a time in the afternoon while the markets were already very stressed."

Read the full summary of the SEC-CFTC report
by going to the following website you can learn what the regulatory agencies have done to try and prevent this type of situation from every happening again:

http://www.marketwatch.com/story/text-of-flash-crash-reports-summary-2010-10-01


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Thoughts worth thinking about

"Our subconscious minds have no sense of humor, play no jokes and cannot tell the difference between reality and an imagined thought or image. What we continually think about eventually will manifest in our lives."-Sidney Madwed



Laws alone can not secure freedom of expression; in order that every woman and man present their views without penalty, there must be spirit of tolerance in the entire population.- Albert Einstein Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. - Leo Buscaglia



A person's true wealth is the good he or she does in the world. - Mohammed



Our task must be to free ourselves... by widening our circle of compassion to embrace all living creatures and the whole of nature and its beauty. -Albert Einstein



The best way to find yourself, is to lose yourself in the service of others. - Ghandi



The unselfish effort to bring cheer to others will be the beginning of a happier life for ourselves. - Helen Keller



Aim for success, not perfection. Never give up your right to be wrong, because then you will lose the ability to learn new things and move forward with your life. Remember that fear always lurks behind perfectionism. Confronting your fears and allowing yourself the right to be human can, paradoxically, make yourself a happier and more productive person. - Dr. David M. Burns



Life is as dear to a mute creature as it is to man. Just as one wants happiness and fears pain, just as one wants to live and not die, so do other creatures. -His Holiness The Dalai Lama



Mankind's true moral test, its fundamental test (which lies deeply buried from view), consists of its attitude towards those who are at its mercy: animals. And in this respect mankind has suffered a fundamental debacle, a debacle so fundamental that all others stem from it. -



Milan Kundera, The Unbearable Lightness of Being



The worst sin towards our fellow creatures is not to hate them, but to be indifferent to them. That's the essence of inhumanity. -George Bernard Shaw

Ego's trick is to make us lose sight of our interdependence. That kind of ego-thought gives us a perfect justification to look out only for ourselves. But that is far from the truth. In reality we all depend on each other and we have to help each other. The husband has to help his wife, the wife has to help the husband, the mother has to help her children, and the children are supposed to help the parents too, whether they want to or not.-Gehlek Rinpoche Source: "The Best Buddhist Writing 2005 pg. 165

The hostile attitude of conquering nature ignores the basic interdependence of all things and events---that the world beyond the skin is actually an extension of our own bodies---and will end in destroying the very environment from which we emerge and upon which our whole life depends.