Sep

11

Friday's move brings to mind several things.

The threat is worse than the execution.

Thursday and Friday this week were eerily similar to last week's.

There were 13 visits to new lows so far using 10 minute prices the Euro at a minimum on Thursday presaged the decline.

The European markets are down from 4.5 to 5%. Overnight Israel market which closed 1500 GMT on Thursday, September 15 was down only 1 % and did not presage the decline in US and Europe, but Japan did close near its low of the day and last 10 days. Canes on Friday do not work beyond a certain magnitude of decline in retrospect.

There were several timely announcements during the day at propitious times that acted as ephemeral fingers in the dike.

One can always tell that there has been a big decline in the market in New York by unobtrusive indicators such as quietude and lack of traffic, and of course restaurant traffic at high ends and the movement of high priced wines is much reduced.

It is terrible to see such a decline as it hurts everyone's wealth and it causes all sorts of wealth effects on consumption around the webs that connect us. One was with a flexion on Oct 19th, 1997 and he made the biggest fortune in bonds ever by anyone that day but he was totally dismayed and sorrowful: "I don't like to make money that way". His feelings were emotional as those described by one of our most astute and poignant operatives were and the loss of wealth and love and life are terrible to contemplate.

Anatoly Veltman writes: 

Memories awakened: what disturbed me the most that October 27th, 1997 was how the U.S. equity traders haven't positioned for it. The Hang Sang pattern was desperate to extreme, well in advance of the 27th — but S&P was still hanging inexplicably tough until the very day. I was careful not to go over 100% Short on statements, so that not to raise clearing house flags. For the life of me, I couldn't understand why U.S. players were not aggressively shorting. That morning, I doubled my intra-day Short — and Chicago finally caved in. I didn't even get a chance to pare back, as futures locked at second limit-down… And yes, I also felt uneasy in my own way about the speed/dimension of the decline. So after the limit-down re-open next day, I reversed to light Long. The mood improved so quickly, that I never got a chance to add any Longs — there were no offers. A genuine Bull was born literally overnight, out of total adversity.


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