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Thread: Did Mark cuban predict crash ?

  1. #1
    Olympic Champ r.payton@att.net's Avatar
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    Default Did Mark cuban predict crash ?

    Did Mark Cuban Predict The Market Crash?

    Thursday, August 11, 2011 7:53 am
    Written by: Eric Adelson






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    It's been a year of vindication for Mark Cuban. The owner of the Dallas Mavericks quieted a lot of the critics who said he was a loudmouth who didn't know how to run a basketball franchise. Now his team is the best in basketball.
    But Cuban is also proving somewhat prophetic in a much more unsettling way. In the spring of last year, only three days after the harrowing May 6 "Flash Crash" that temporarily plunged the Dow Jones Industrial Average more than 1,000 points within minutes, he wrote a blog post that seems chilling today. He titled it, "What Business is Wall Street In?" And toward the end, he wrote in bold, "There will be another crash."
    Granted, there are a lot of doomsayers out there. But Cuban is not that. He's a successful businessman -- he sold his Internet start-up in 1999 for $5.9 billion in Yahoo! stock -- and he says he's been involved in the stock market for the better part of a decade. But what makes his post stand out even more is that he named a specific reason for the predicted "crash" -- professional traders.
    "The only people who know what business Wall Street is in are the traders," Cuban wrote on May 9, 2010. "They know what business Wall Street is in better than everyone else. To traders, whether day traders or high frequency or somewhere in between, Wall Street has nothing to do with creating capital for businesses, its original goal. Wall Street is a platform. It's a platform to be exploited by every technological and intellectual means possible."
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    And more than a year later, a lot of Wall Street experts are blaming high frequency trading for this month's extreme stock market volatility. The swings are wild, to the tune of hundreds of Dow points within minutes, and "the machines" profiled last year by 60 Minutes are getting a lot of the blame.

    Cuban went on to make another point, about how entire nations are now bought and sold within seconds and even nanoseconds:
    "It?s hard to believe," he wrote, "but evaluating countries as an investment is now easier than evaluating companies."
    Lo and behold, the current malaise on Wall Street is tied not to the earnings of public companies -- which are largely strong -- but to the debt load of national economies.
    But Cuban came back again to the traders, who he called "hackers" because, he said, they look for weaknesses in the system to exploit for short-term gain.
    "The Government needs to create incentives for this business," he wrote, "and extract compensation from the traders/hackers for the systemic failure level of risk they introduce."
    He concluded again in bold text with a scary forecast that, although not completely unique to him, now looks more and more accurate:
    "There will be another crash, because there are too many players looking for the trillion dollar score."

    Can someone please tell me what high Frequency is ? I took a business class at IU and was told the purpose of the Market was to generate income for businesses-apparantly this is not true anymore ? How can traders manipulate the Market ? I thought they had Watchdogs in place for this ? How can Nations be bought and sold ?
    You know, I think I would rather be a man than a god . We don't need anyone to believe in us. We just keep going anyhow. It's what we do.

  2. #2

    Default Re: Did Mark cuban predict crash ?

    I read that a few days ago. Billionaires are not dumb. I've never worked for a poor person or had to give a stock tip to a billionaire. Sometimes people need to just listen when people speak about their particular expertise.

    Listen to the greasy auto mechanic when you hear a rattlin' in your car, listen to the guy with a stringer full of fish when you're fishing, and listen to a billionaire when talking stocks. Oh, and don't forget to listen to a rabid wife when she says "YOUR BOYS ARE ABOUT TO DIE IF THEY DON'T QUIT....."

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    Olympic Champ RYou's Avatar
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    Default Re: Did Mark cuban predict crash ?

    How can traders manipulate the Market ?

    Traders can "borrow" every share you own without you knowing it and without your permission, and sell it whenever they want. Enmasse, they can move the entire market downward within minutes short selling (selling stock they've "borrowed" from you and I). Then they start buying you stock back at a lower price. Of course if they sell and the market moves higher, they lose, but it's pretty clear that they have their finger on the sell button just waiting for bad news.

    On the flip side, if they want to buy when the market moves up, they have to be backed by a credit account or pay up with cash. You can see how much easier it is for them to push the market down not being to required to have cash or owned shares.

    You and I, we have have to have shares in hand to sell, "naked" selling is prohibited. They clearly have given trading firms an advantage not available to the average schmo.
    Life's not the breaths you take, the breathing in and out that gets you through the day ain't what it's all about. It's the moments that take your breath away.

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    Olympic Champ r.payton@att.net's Avatar
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    Default Re: Did Mark cuban predict crash ?

    RYOU,
    HOW can this be legal ? I thought the market was more open (as I see ads for personal trading on my PC all the time ), this would literally make it impossible for a private trader to honestly be a player in the market(unless a billionaire). I don't doubt your word yet if what you say is true then are the people who try to control their own portfolio merely given the illusion of control ?
    Thanks for clarifying the situation .
    You know, I think I would rather be a man than a god . We don't need anyone to believe in us. We just keep going anyhow. It's what we do.

  5. #5

    Default Re: Did Mark cuban predict crash ?

    Quote Originally Posted by quinn14 View Post
    I read that a few days ago. Billionaires are not dumb. I've never worked for a poor person or had to give a stock tip to a billionaire. Sometimes people need to just listen when people speak about their particular expertise.

    Listen to the greasy auto mechanic when you hear a rattlin' in your car, listen to the guy with a stringer full of fish when you're fishing, and listen to a billionaire when talking stocks. Oh, and don't forget to listen to a rabid wife when she says "YOUR BOYS ARE ABOUT TO DIE IF THEY DON'T QUIT....."
    Don't shoot pool against a guy who brings his own cue. Don't play cards with a guy named after a city.
    But I really like "Don't forget to listen to a rabid wife ...."

    R.I.P. Cyrano and Roxanne.

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