Retarded Congress Still Investigating the "Flash Crash"
Last week the Dow dropped 10% intraday before recovering most of it's losses. The mid-day sharp drop off was called a "Flash Crash". There was speculation that a single error by a trader caused this, and measures need to be put in place to stop it. Congress is just getting more retarded by the minute here. This is what really happened. The Fed has been building another stock market bubble over the last year or so. They have interest rates so low, that you can't earn any return on safe investments like savings accounts or CDs. That puts a ton of pressure on people to move their money into the stock market, to get some form of reasonable return. These people do not want to put their money into the market though, because it is not safe, and is way overvalued. Now that the bubble is pretty well inflated, people are looking for any sign of trouble to get out. A bad start to the trading day last week was the sign of trouble people were looking for, and they got the fuck out of the stock market. They were behaving rational, while the stock market is not. So how about this Congress? The stock market is way overvalued as a result of the Fed's easy money policies. The correct value is way below 10,000 for the Dow. The flash crash did not even get us close to fair value, but it was a step in the right direction, proving stock markets can get it right over time. So today, while Congressional hearings continue on the subject, the market is trading near the intraday bottom from last week. This tells me the markewt was simply overvalued and moving towards a correct valuation, but I knew that already. Congress should be investigating why the market snapped back intraday during the "Flash Crash", as that was a move that can't be supported by fundamentals. How about this? If you don't want to see the stock market crash, quit creating stock market bubbles. Bubbles can never last, and this one will not either. When you see the stock market running up day after day, you know something is not right. This was the behaviour prior to the Tech bubble in the late 90s, and we know what happened after that. Learn some lessons from the past, and stop with all these bubbles please. And don't act stupid when a bubble you created bursts. It just makes you look even more retarded than before.