Tuesday was an anomaly not a crash, says White House
George Bush and Ben Bernanke, head of America's central bank, launched a concerted attempt last night to calm fears of a full-blown crash after a second day of turbulent trading around the globe.
With London posting its second three-figure fall in a row, and Wall Street struggling to recoup losses from its biggest sell-off since 9/11, the White House dismissed the plunge as an anomaly. Edward Lazear, chairman of the US president's council of economic advisers, told a House of Representatives' hearing that officials had found no conclusive reason for the sharp decline. "It looks like whatever happened yesterday was anomalous," he said. "We don't think of it reflecting any of the fundamentals in the economy, which I think are quite strong."
http://www.guardian....2023753,00.html
2.
Dow Jones admits 70-minute trading glitch
*
* March 01, 2007
THE company responsible for compiling a key 30-share US market index said today it failed to give a true picture of trading for more than an hour yesterday.
Traders were unaware of the true value of the Dow Jones Industrial Average, a key indicator of American market sentiment, for a full 70 minutes yesterday at the height of the turmoil gripping world markets.
Dow Jones Indexes, the company that calculates the figure admitted today that a system problem that began at 1.50pm amid "unusually heavy" trading volume was responsible for the delay in calculating the value of the index, which is based on 30 component stocks.
http://www.theaustra...213-601,00.html
3.
China's drop was engineered - says Stratfor
Global Market Brief: China's Engineered Drop
February 28, 2007 01 56 GMT
China's Shanghai Composite Index tumbled 8.84 percent Feb. 27, its largest fall in a decade. Its sister index, the Shenzhen Composite Index, fell 8.54 percent. The size of the drop in China is not significant in and of itself. On a number of occasions during the past year, the Shanghai Stock Exchange has experienced 5 percent plus daily reductions, and it has already boomed and busted once this decade.
But that hardly means the development is insignificant. The fall is important both for how it happened and what it triggered.
How it Happened
This was an engineered drop.
The Chinese government has become increasingly concerned about levels of investment in its economy or, more accurately, the sheer amount of money that is chasing projects. State firms with limitless access to subsidized capital from state banks have used that access to launch thousands of nonprofitable firms. This glut in "investment" money drives up the cost of commodities and adds industrial capacity without actually producing anything of much use, making life more difficult for the average Chinese and unduly harming relations with foreign powers that face a glut of otherwise noncompetitive Chinese goods.
http://www.stratfor....lected=Analyses
So, everything is under control, except for few glitches. Chinese government will engineer a rally, when necessary. Buy and hold. Slamma jamma. Slamma Jamma.
Edited by greenie, 28 February 2007 - 09:42 PM.