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Latest Stock Plunge: Another Fish That Will Get Away?
Posted By Michelle Horstman On May 8, 2010 @ 3:00 pm In NewsReal Blog,Uncategorized | No Comments
Call me curious, but it seems like a lot of big fish in the financial world these last few years have all gotten away from us. Add this week’s odd and unexplained stock market nosedive to the list. It seems like it is past time for us to start demanding some answers.
It’s amazing how quickly we forget. Here are some questions I have that I have yet to have seen any answers for. Considering the huge potential impact they have had, how could we have allowed these fish to slip off the hook?
One official said they identified “a huge, anomalous, unexplained surge in selling, it looks like in Chicago,” about 2:45 p.m.
Proctor & Gamble stock went from $62 to $39.37 in minutes. Proctor & Gamble has had an unusually tough week, as their Pampers diapers are also under investigation by the Consumer Products Safety Division, although it seems testing has shown no evidence of any problem with the diapers. Of course, just the news of an investigation spreads like wildfire and can cause serious damage to a brand. Proctor & Gamble executives have made no secret of their concern with this administration’s financial policies. Is someone targeting them or were they just the unlucky recipients of this “glitch”? Whether or not someone singled them out, we must demand to know how this major stock market incident happened and who facilitated it.
The question needs to be asked: Why should American taxpayers contribute to such a generous bailout when most states, including California, New York, and New Jersey, are making severe budget cuts to balance their budgets?
On his blog, the Market Ticker, Karl Denninger wonders if the Treasury “has been surreptitiously issuing bonds to, say, Japan, as a means of financing deficits that someone didn’t want reported over the last, oh, say 10 or 20 years.” Adds Denninger: “Let’s hope we get those answers, and this isn’t one of those ‘funny things’ that just disappears into the night.”
Karl, how did you know?
“On Thursday at about 11 o’clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to the tune of $550 billion, as being drawn out in the matter of an hour or two.
“The Treasury opened up its window to help. It pumped $105 billion into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there, and that’s what actually happened.”
As far as I’m concerned, we should not consider passing any kind of financial reform bill until these questions are answered. What Michelle Obama wore to a state dinner, the latest blurb from the mouth of Joy Behar or even Obama’s side splitting White House Press Dinner routine are all delightful diversions, but we can’t be so easily distracted. Let’s reel in the answers to these stories before we have to add another one to the list.
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