Bank of America: Flash Crash in 2018, War to Follow

 

In its analysis for the first half of 2018, Bank of America is warning investors of a “flash crash” the likes of 1987, 1994, 1998. And  it warns that the central bank policies that have created the current conditions can’t be reversed, leading to an inevitable war to follow the crash.

In 1987, known as “Black Monday,” global stock markets lost huge portions of their valuations, ranging from 60 percent in New Zealand to 23 percent in the U.S. In 1994, the Great Bond Massacre saw global bond markets collapse, starting in the U.S. and Japan, resulting in treasury rates skyrocketing through the first nine months of the year.

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Unconscionable Manipulation in the Stock Market

https://upload.wikimedia.org/wikipedia/commons/c/c1/Wynn_2_%282%29.jpg

 

Last week casino owner and billionaire Steve Wynn admitted something that few people on the inside are every willing to acknowledge. He clearly stated that stock market can be manipulated using the very loopholes that we identified at work in the 2008 collapse, including naked short selling, dark pools, and high-frequency trading. Here are some quotes from his recent conference call:

“…the exchanges don’t enforce the rules of naked shorts. So, I mean, it’s unconscionable manipulation of the stock that occurs. They open up every morning, and the high-frequency traders in the shorts have a ball selling shares, and then value buyers step in the afternoon and they cover the shorts. I mean, it’s regular casino activity.” The company currently has about 14 million shares short, or almost one-quarter of total float. Continue reading

Fed official warns ‘flash crash’ could be repeated

Please see the source for the video.

 

A senior Federal Reserve official has warned that last autumn’s “flash crash” in US Treasurys could happen again due to the changing nature of the US government debt market, and urged banks, investors and exchanges to adopt a revised set of guidelines in response to the turmoil.

However, Simon Potter, executive vice-president of the Federal Reserve Bank of New York, warned in a speech on Monday that the unintended consequences of regulatory and market changes could mean that “that sharp intraday price moves become more common” in the future. Continue reading