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at the start of the global stock market sell off during october, a number of stock exchanges closed their doors in an effort to halt the crash. russia and indonesia were two of a handful who thought this might be a good idea.

as it turns out, it wasnt exactly the brightest move.

after closing for a day or so, they both opened only to crash even harder than they had before.

so they were closed again. but this time for a few more days.

and it crashed even more after it opened.

russia closed its market 20 times in the month of october alone,… and it didnt do anything to stop the slide.

i would argue that it actually made things much much worse, and here’s why:

traders are already losing money, but traders will generally still keep money in the market to some degree, because they know that if it does really get very very bad they can always pull it out tomorrow,….. ever the optimists.

when you close an exchange you basically say “no, you cant take it out until we say you can”

alot of traders are playing with borrowed money, infact the majority of traders are playing with borrowed money. so by locking up the bourse you are locking up their cashflow which is what leads to the massive sell out the day the bourse opens up again.

closing the bourse could have the effect of making the market more volatile rather than less.

what? close it so traders can regain their senses?

hahahahahahahahahahaha!

no such thing.

the panic may be greater.

its like this,….

you’ve got the choice of either

a) being cut a thousand times and slowly bleeding to death, with the hope that you might survive, but you know you will probably die,

or

b) we’re gonna slice your head off in one swift move.

which one would make you kick and scream more?

there is only one law on the markets, and that is that traders and investors are not rational.

so stupid idea or not?

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12 Comments

  1. Thanks for your similar story coverage. Your points absolutely valid

  2. much obliged.

  3. Oh Skunk. You are trying to talk rationally to people who think that investing in the market is not a gamble.

  4. yeah i know, but its fun to rant and rave once in a while πŸ˜€

  5. with this malfunctioning-financial-environment, and untill we have the lowest possible percentage of PURE TRADERS, nothing will do the INVESTORS any good!

    and one more thing, do those traders really know what is the difference between “buying a share” and “buying into a business”?? not mentioning how to put a value on that?

  6. lol half of them dont even know what their companies do.

    and thats just it,… this halt is only helping the traders ie small over leveraged traders, leveraged investment funds, and leveraged companies playing the market who have no business doing so.

    we were on our way to getting rid of them, and yes the economy would have suffered, but it would have emerged leaner and meaner.

    now its just gonna get fat and flabby again.

  7. Gee…. that sounds like what I bet is going to be the outcome for the “Big Three” US automakers. I’ll bet (with Monopoly $$, of course) they get the bailout they’re begging for and continue on fat & flabby path they’ve grown accustomed to.

    Meanwhile, Japan’s Nissan (I think Nissan; maybe Toyota) just opened a new manufacturing plant in Indiana. So lean & mean does work!

    Hey Skunk! Where are you? (I’m so confused… I thought you’d gone fishin’ in Tokyo)

  8. yeah the big three will probably get some sort of aid. theyre also kinda too big to fail in that apparently the us auto industry supports 5 million jobs,… that would be alot of jobs to lose.

    and yeah i am gone fishin in tokyo πŸ˜›

    pictures and or video to come soon πŸ˜€

  9. So two of the CEOs from the auto aid requestors showed up in their private jets. Nice.

    As one Senator said, it was quite a sight to see private luxury jets land, and the occupants come out of the planes with beggars’ tin cups.

    I’m looking forward to pictures and/or video from Tokyo! As well as your take on that great land.

  10. Are you gonna have more posts for 2008? or waiting for 2009 to post :-P?

  11. Hey you! Loving your new layout! πŸ™‚

    Jitterbug
    From 7 seconds

  12. Its been a while since your last post. Your either really busy, laid off, or dont find any of the events interesting, so which one is it?


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