Panic in the markets and streets

2011-08-22 13:15

August has not been the typical Holiday month. The European sovereign crisis is creating tensions in the interbank market, and Spanish Italian and French banks are now seeing wider CDS. The tensions are also visible on the social front with riots in London and spontaneous incidents of group violence in Chicago Cleveland Philadelphia New York Kansas City. Curfews have been imposed to under 18 in Philadelphia and Kansas City. In the markets many indexes are at two year lows while gold is at an all time high. The second week of August saw some extraordinary volatility in the markets with the Dow Industrial experiencing 4 straight daily 400 point closing swings.The aggressiveness and leverage employed by participants in the markets made them vulnerable to forced liquidation orders.Only participants without positions during August, manage to keep their gains, all the other participants were forced to control their losses.The safety trade is back on.  

 

 

 

 

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