HurricaneZoo.com

Yesterday’s action in the stock market was intense; you needed a brass pair… to be short the market, or not watching TV. It was  explosive to the down side around 2:45.  The market dropped nearly a thousand points in a mater of minutes. There hasn’t been a move like that in the market since 1987… maybe never, depending on which matrix you use. If you are into that sort of drama, I hope you saw it; it was a sight to consider.

 If you were waiting on a pullback, you got it. You didn’t have time to think about the move, it came like a bolt of lighting. If your strategy was not clear in your mind before the pullback, chances are good that you missed the boat.  There was no time to call your broker, do any chart work, or get a cup of coffee for that matter. The action was that fast.

 The disbelief had triggered outrage, and commentators on the business channel made understated accusations of manipulation. Calling for an explanation from the traders on the floor of the NY stock exchange, which were standing stunned as if frozen in the headlights. There will be questions and comities formed to study the event. Tens of millions will be spent to find the answer to what went wrong. What happened? And who made a profit and who lost from the event. The media discussion will be historic. Still the answers will only lead to more questions about the rules of trading regarding individual investors – which should mean equal access to investing and trading the market; not more regulation for the little guy.

 There were huge losses for some and gains for others. The losers will cry foul; and those that gained will keep quiet! It will all be blamed on a computer glitch, along with human error. The early story was that a City Bank trader entered an order for a billion shares when he meant a million, but that is fodder for the masses. The real story, or at least one I can digest easily, is this: when strange trading action occurs in a particular stock, a specialist on the floor of the NY stock exchange can halt trading for thirty seconds to sort out events and find an honest bid and ask. The electronic exchange has no such time out.

 When the specialist halts trading, he notifies the electronic market that he is halting trading for thirty seconds. During the halt in trading by the specialists, the computers in the electronic exchange take over and fill market orders.  If you are selling at the market and the bid is 30, you expect to get around 30. But if the only buyer is at 15,  you only get 15 and not the thirty you expect. I believe this is what happened, but  I need time to take it apart and smell the fumes.

 The latest update, as to the cause of the sell off, is that it was the specialists trading halt that caused the melt down. I can see it. There are lessons to be learned from all of this. Always place limit orders never market orders.

 David Helmericks

To the president of Columbus Bank & Trust

Billy,

Your company CB&T (Columbus Bank & Trust), which is an amalgamation of small financial companies, put me in a bad spot today, declined my credit card purchase. The vendor was on the phone with one of the dullards in your customer service department trying to rectify the problem. After they had extracted all of my personnel information, including social security number, which I had to give to the check out clerk, my purchase was declined. No reason was given. So when I got home, I had to call your people back and go through the entire process again. I don’t know about you, but I have better things to do than to be put on hold for twenty minuets. I found out my credit limit had been reduced from $5,500.00 to $800.00 and that my 50.00 purchase put me over the new reduced limit. I have had the First Equity bank card for over three years and can’t remember ever running a balance, too bad for you. But you still get you cut from each purchase.

It seems to me, you want to extend credit to people who pay their bill in full and on time. But you and I both know that is not true. Currently the interest rate stands at 23.99 percent and goes up to 29.99 percent if I am late. Is the banks logo a shark fin? You make little money from people who pay the bill in full and on time each month. The banks extend credit to people who can’t pay their bill, that way you make the vigorous interest rate you charge. That kind of logic is what got the banks into the current crisis; moreover, it seems your bank has not learned the lesson.

 I am tired of dealing with idiots and thought I could profit by shorting your company stock (SNV), but found the share price to be under five dollars making it unavailable for shorting. I also found out that Gail Baker Page, a former Columbus Bank & Trust vice president was sentenced to eight months in prison for bank fraud. I can no longer, in good conscious, continue to do business with a bank on its way out, and would advise you to start sending out your resume.

 Good luck,

 David Helmericks

Charleston SC 29416