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At this point, I don’t entirely believe the story from BP managers about this oil spill. The decision to withdraw the drilling mud even though tests showed likely leakage of gas into the well was too reckless of a decision for BP executives to make. I would believe that story if this decision was made by a young upstart oil producer with little experience in offshore drilling, but I don’t entirely believe it from BP. For BP executives, that decision was just too reckless and risky. I suspect that some of the BP managers who have talked to investigators are misleading investigators or at least not telling the whole story.

FBI and congressional investigators should be aggressively questioning BP managers and asking them the same kinds of questions in different ways in an effort to find inconsistent statements or outright lies. I don’t think we’ve heard the whole truth about this disaster yet.

Yeah, it’s that and I think Selig and the team owners are concerned about angering the fans in Arizona and really hurting the Arizona Diamondbacks franchise. If they move the game, that also sets a precedent of reacting to political events, and once MLB starts to do that then when does it end?

Good point. I wonder if the LA city council has considered how many visits from Arizona tourists they’re going to lose because of their boycott of AZ business.

What a disaster. It looks like there was a simultaneous failure of both the well construction and the blow-out preventer. How can huge, well-capitalized companies like BP, Haliburton, and Transocean allow such a disaster to happen? I’ve seen a lot of screwed up information tech projects in the corporate world but I thought deepwater drillers couldn’t screw up this badly.

I don’t believe this explanation for one second. Those firms should all have software to check for input errors like that and stop them from being sent into the market. My trading workstation has that kind of software and it’s just a java-based workstation from a firm where anyone can set up an account. I have it set to stop any trades greater than 200 shares and ask me for confirmation on any share amounts above 200. That way I can’t accidentally type in 2000 instead of 200.

Someone is spreading BS rumors on Wall Street. This looks more like a breakdown in orderly functioning of market maker firms. I’ve seen a great deal of that behavior before in the first 15 minutes of the day, but never to this extent in the middle of the day.

Me too. In fact, I don’t believe it’s possible for any individual trader to place an order in the billions of dollars at one time. No way could that be possible in any Wall St. firm. The software on their workstations would reject an order of that size and they would not be able to override that rejection. This plunge could possibly have been caused by super fast high speed computer trading that just sent too many sell orders into the market too quickly for the market markers to respond fast enough, because as far as I know, buy orders from market makers are placed by real live people and not computers. That’s an alternate theory to the theory that the market makers didn’t properly implement the role they’re assigned in the stock market today.

Take a look at this data from a 1-minute intraday chart of Procter & Gamble today (unfortunately FR’s software takes out extra spaces between the numbers so it’s not easy to read):

Time Open High Low Close Change Volume

14:44 60.86 61.15 59.46 60.96 0.15 256934
14:45 59.65 60.86 56.50 57.36 -3.60 373803
14:46 57.36 59.40 47.51 47.71 -9.65 278273
14:47 49.00 57.01 39.37 55.00 7.29 469579
14:48 55.00 62.05 53.00 58.00 3.00 303799
14:49 57.79 60.34 57.00 59.48 1.48 352332
14:50 59.67 62.59 58.91 62.59 3.11 241590

I heard on CNBC that this action in Procter & Gamble was the main cause of the breakdown in the Dow Jones Industrial Average. This kind of breakdown between 2:44 PM and 2:48 PM should not be possible in a big consumer goods stock like PG without any big news. I heard these low trades happened on the Nasdaq exchange. Some of it was normal cascading stop loss orders triggering each other in sequence, but still there should always be enough buyers in the way to prevent a drop of $17.99 in less than two minutes. This is all assuming that the data from my chart service is correct, and it has historically been a highly reliable chart service.

In any event, this action in PG needs to be investigated and I heard today that Procter & Gamble is asking for an SEC investigation of the trading in their stock today.

I’m hearing on CNBC that the sharp plunge may have been from somebody at a big firm pushing the B key for billion instead of the M key for million. I don’t believe that for one second. Those firms should all have software to check for input errors like that and stop them from being sent into the market. My trading workstation has that kind of software and it’s just a java-based workstation from a firm where anyone can set up an account. I have it set to stop any trades greater than 200 shares and ask me for confirmation on any share amounts above 200. That way I can’t accidentally type in 2000 instead of 200.

Someone is spreading BS rumors on Wall Street. This looks more like a breakdown in orderly functioning of market maker firms. I’ve seen a great deal of that behavior before in the first 15 minutes of the day, but never to this extent in the middle of the day.

It’s all of that and more. There was literally a breakdown in the trading system for over five minutes. I was watching it and suddenly the DJIA was down over 900 points at one point, if I recall correctly. The drop happened very suddenly from 10471 to 9873 in less than ten minutes, based on my 5-minute chart that I’m looking at from my chart service. That’s a drop of 598 points in less than ten minutes to the low of the day. That’s a breakdown in the trading system...not good for investor confidence.

yeah, this is not good at all. There was a breakdown in the trading system for about fifteen minutes on top of a big selloff for the day.

Something strange happened all in about 15 minutes. It looks like possibly one or more market maker firms didn’t do their jobs properly and withdrew their bids completely in some stocks while other firms dropped their bids down way low, which caused some trades to execute at extremely low prices for a few minutes. That knocked the DJIA down by 800 or more points (approximately) for a few minutes. This needs to be investigated by the SEC for sure. I’m not sure what happened, but one possibility is a breakdown in the functioning of market maker firms.

The PLAN is expanding and modernizing with terrifying speed. I would think the military intelligence agencies in Japan and Australia are getting quite alarmed by this expansion.

Looking back at economic history, starting in the late 90s the western world became complacent and overconfident about future economic growth. By 1997, the OECD nations had gone 16 years with only one brief recession and they started to take economic growth for granted. Then every stupid financial & economic decision everyone could possibly make seems to have occurred in the next ten years from 1998 to 2007: the euro currency was launched with no administrative mechanism to enforce critically important fiscal discipline within the euro zone, then we had a massive stock market bubble in 2000, followed by a real estate bubble and an incredibly huge amount of dumb real estate lending and borrowing throughout the western world. During all this craziness, a lot of complacent individuals and institutions also bought way too much sovereign debt from fiscally undisciplined countries like Greece, Portugal, and Spain. Now they're stuck with sovereign bonds that are gradually turning into junk bonds.

Meanwhile the European policy makers were thinking in terms of years while dealing with this crisis, pondering all the long-term implications of bailing out the Greeks, while the financial markets are thinking in terms of weeks to get a solution to this debt problem. The Europeans waiting way too long to bail out Greece and now the slide in bond prices and the euro is a strong established trend and has become emotional and self-sustaining at least for another couple of weeks or more. I hope people learn something from this mega-recession and get back to building strong businesses in the private sector instead of trying to build wealth through all this borrowing, lending, and speculating on stocks and real estate.

A similar blow-out happened last August off the coast of Australia:

"Halliburton also was the cementer on a well that suffered a big blowout last August in the Timor Sea, off Australia. The rig there caught fire and a well leaked tens of thousands of barrels of oil over 10 weeks before it was shut down. The investigation is continuing; Halliburton declined to comment on it."

Not impossible, but it would be very difficult for an enemy submarine to move within 40 miles of New Orleans and not be detected by the US Navy. I’d say its much more likely that the cause is some kind of mistake made in operating the equipment on the rig. Keep in mind that there’s almost always some natural gas that moves up the well pipe with oil and if that gas is not handled properly and flared off, it could cause an explosion. All that diesel fuel has to be handled properly too or it can cause an explosion and fire.

I agree; sabotage is extremely unlikely in this accident. One or more of three things happened here:
1) An error in the design or manufacturing of the drilling equipment.
2) An error in the operation of the drilling equipment.
3) Some kind of completely unexpected event occurred, such as pressures on the oil pipe and equipment that were well above any pressures ever seen in offshore drilling and above the pressures this equipment could tolerate.

If I had to take a shot at it, I'd say item 2 is the most likely cause of this accident. Somebody probably made a serious mistake in operating the equipment on the rig. Defective equipment and an unexpected event are also possible causes, perhaps combined with errors in equipment operation. Sabotage is about the least likely cause. I can't think of who would gain from sabotage other than environmental groups, and they don't have the ability to sabotage a deepwater oil rig.

Immigration activists usually claim that opposition to illegal immigration is a form of hatred and racism. There’s actually no hatred involved. Here’s why most Americans oppose illegal immigration:

1) Illegal immigrants raise the crime rate in America.
2) Illegal immigrants increase the motor vehicle accident rate in America. ( I can testify to that after a few harrowing taxi rides in Mexico with drivers who were stunningly reckless even with passengers in their cabs. A high percentage of illegal immigrants are dangerous drivers, no question about it.)
3) Illegal immigrants receive a high level of government benefits from the states and localities and divert money from schools and other priorities while driving up taxes.
4) A high percentage of illegal immigrants, if they become citizens or register to vote illegally, register as Democrats and vote for liberal politicians. These liberals can pass laws that most native-born people strongly oppose, such as the recent monstrous health care law. We have the right to resist a takeover of our country by left-wing socialist politicians because we strongly oppose the laws they vote for.

If you ask immigration advocates whether we should allow an unlimited number of Mexicans to immigrate to the US, most activists would say “yes.” But if you then asked them if we should also allow an unlimited number of Chinese people to immigrate to the US, even as many as 100 million Chinese in the next ten years, I think most of the activists would say no to that idea because it would overcrowd America and overload our infrastructure. So their campaign for unlimited immigration is probably intended primarily for Mexicans and other people from Central America. We don’t hate those people. We just want them to fix the problems in Mexico instead of moving up here and bringing those problems to America.

"Is it a law that you have to be an idiot to be elected to office in California?"

It's not a law. It's more of an unwritten rule within the democrat party in California.

We didn’t bail out Europe. There’s no way the Fed can secretly bail out an entire group of nations.

The Europeans are having fiscal problems because of the great recession, but also because so far they want to unite partially but not completely in the same way the states are highly unified in the US. They want a common currency, a common central bank, and a coordinated economic policy, BUT they don’t want to be blend together and be completely unified and economically responsible for the other countries in the EU. Here in the US, we’re economically responsible for the other states to a large extent whether we like it or not. California has been subsidizing the other states for decades by paying much more into the treasury than it receives in federal spending. Now those roles may have to reverse and the federal government and the other states ultimately may have to guarantee California’s muni bonds to prevent the interest rates from rising up to unaffordable levels.

The Europeans don’t want to blend together and take on the problems or other countries and be economically responsible for other countries. So they have no mechanism currently to guarantee the sovereign debt of the smaller EU nations in a crisis. So sovereign bonds of Greece and Portugal are collapsing in price because there’s no EU economic authority to back them up. Ultimately the Europeans will have to decide if they want to really blend together economically and be responsible for each other, or whether they want to kick a few smaller and fiscally irresponsible countries out of their economic union.

It looks like they wanted to be an economic contender to the US and get rid of all the different currencies without thinking the EU all the way through, including how they would handle an economic crisis and plunging confidence in sovereign debt.

Now Levin is really beating these guys up and lecturing them sternly. It’s a bizarre display of political deception as Levin attempts to shift the blame for the housing bubble from the federal government (the primary underlying cause of the bubble) onto the private sector, including Goldman Sachs.