Friday 18 December 2015

Todays market crash (*snort*)

I may have to leave this half written, or temporarily unreferenced. I have somewhere I have to be.

Wow, things are a little difficult at the moment. Not massively so to be fair.

My perfect scenario would be for the markets to crash and all the chaos involved in the 'Illuminati Tribunals' to happen now. I do not need to engage in the illusion of Christmas. I do not need the illusion of safety. I'm ready now.

However, that is unlikely. I do not believe there will be a market crash later today through the DOW market open and close, but if there were, and I feel compelled to highlight the information, this is why it would be:

Options expiry:

Options are automatic programmes that buy and sell stock at certain intervals according to pre- programmed requirements.

An example would be I have a stock valued at £50. I have 1000 of them. These are £50,000 together. If I know the stock has previously had trouble I could set up a 'stop gap' or a 'put' at say around £30. If the market tumbles and goes to £30 then the stock will automatically sell. If the market tumbles however and I DON'T have a stop gap, the company may go below £30, right down to £0.01 and I have lost all my money. (Company would probably go bankrupt before £0.01)

These options are going to expire today. So what that means is that many people who own shares who don't pay attention because their 'puts' will defend them from harm (or other options may buy, being 'short' and bounce a market going down). Faced with these stocks that will not be protected. People may choose to sell and be far more gittery.

So in that example, if I'm holding a £50 stock with no stop gap, and it starts tumbling, I may just get out, especially if the market is on a panic creating down anyway.

Bond market chaos:

The bond market is in a lot of trouble. Junk bonds in particular. Companies are already going belly up and insolvent (not paying their customers back their money). This is how the 2008 crisis started.

This may have a strong effect on corporate buybacks.

WTI crude:

Currently at an all low level (WTI Crude $35.02). Considered very important although the oil market is somewhat opaque so the reasons aren't exactly clear but most people in finance seem to reference this as important.

Crude level has pulled the market down previously.

Yuan devaluation.

The same thing that single handedly caused the August 21st crash is happening now, only a lot slower, but still happening. This is why the Americans are doing weather garbage on China IMO, and blowing up the occasional factory. Warfare.

Fed Rate Hike Superstition:

The Fed has recently, very minutely increased interest rates. This is effecting liquidity in the markets and people may think that it is because of the Fed Rate Hike that any of these other problems are happening and 'trade accordingly'. I.e. Sell, when they don't know the fundamentals of the market.

This

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