Stocks Down After Coup Attempt in Thailand

Stock prices dipped sharply after news of an attempted military coup in Thailand was reported.

Stocks, oil and US dollar currency are down, while bonds and gold are up.

From the AP news wire:

Traders watching Thailand closely are certain to remember how trouble in the kingdom has had worldwide implications in the past: The Asia currency crisis that erupted in 1997 began with the devaluation of the Thai baht, then snowballed into an international economic downturn. The baht fell sharply Tuesday.

Thailand Prime Minister Thaksin Shinawatra, who was in New York attending the United Nations General Assembly, faced calls to step down amid allegations of corruption and abuse of power.

The news hit the market on a day stocks had been drifting lower following a sharp drop in the pace of U.S. housing starts in August. Housing starts fell 6 percent, twice as fast as expected. New housing construction notched its fifth decline in six months, hitting its lowest point in more than three years.

(Reported from AP Business news wire)

This uncertainty with Thailand as well as the poor US economic indicators and data is hitting the stock markets hard. If these various issues remain uncertain, we will see shaky action in the markets with the possibility of a minor correction wiping out many summer gains. I would like to see the Thailand issue resolved swiftly and peacefully, which would bolster the Asian and US stock markets.

Here’s a look at the Nasdaq index right now:

Nasdaq 2006-09-19


Fat Finger Syndrome Costs Tokyo Trader $18 Million

Fat Finger Syndrome Costs Tokyo Trader $18 million.

A stock trader in Tokyo has the “curse of the fat finger” – mistakenly selling over $18 million of web advertiser Adways through a typing error. The trader’s simple typo cost his firm, Tachibana Securities, $18 million.

Fat finger syndrome is accidentally pressing the wrong button when entering details on a computer keyboard.

“It is known as fat finger syndrome . the occasional tendency of stressed traders working in fast-moving electronic financial markets to press the wrong button on their keyboard and, in the process, lose their employer a mint ..” (The Guardian, 9th December 2005)

The trader had apparently intended to sell shares in another firm with a trading code similar to that of Adways but with a much lower share price.

The trader cancelled the order but only after 1,482 trades, just under 10% of Adways’ total, had been completed.

“It was an input error,” said Tachibana’s vice-president, Takahiro Tsuchiya. “The trader noticed the mistake immediately and cancelled, but it was too late to stop some of the shares from trading.” (The Guardian, 20th June 2006)

I personally have never had a problem with fat finger syndrome or the curse of the fat finger. I hope I never do. Most online brokers, such as TD Ameritrade, will not execute an order if you do not have the funds available in your account, which limits the possibility of fat finger syndrome from occurring in daytraders like most of us who trade online. However, working a large firm, these simple safeguards are not always in place – as we have seen today in Tokyo and many times in the past. This latest case of the curse of the fat finger should teach us all to verify and double check our order entry details. I know I do. No one wants be the next trader the curse of the fat finger strikes!

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Asia Indices Rally Strong Gains

Asia indicies are rallying and showing strong gains Friday following stellar gains in U.S. indices. on Thursday. All major Asian indices are posting gains, with all index prices gaining over +2% except one (Index: ^KLSE – Kuala Lumpur), and some indices gaining over +3%. The Asia market rally follows the NYSE and NASDAQ rally on Thursday’s trading in the US.

Here’s a quick summary of the Asia indicies and their gains today:

  • ^SSEA – Shanghai A-Share Index – 1,654.76 +2.64%
  • ^HSI – Hang Seng Index Index – 15,837.19 +2.61%
  • ^N225 – Japan NIKKEI 225 – 14,879.34 +2.82%
  • ^STI – SES Straits Times Index – 2,373.91 +3.10%
  • ^TWII – Taiwan TSEC Weighted Index – 6,575.77 +2.32%
  • ^KS11 – KSE KOSPI Composite Index – 1,262.19 +3.51%
  • ^KLSE – Kuala Lumpur – 893.50 +0.79%
  • ^BSESN – Bombay BSE Sensitive – 9,896.93 +3.69%

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Gold Biggest Single Day Decline in 15 Years

Gold fell 7.3% to 563.40 in Tuesday’s trading. This is the greatest decline in a single day in the last 15 years of gold trading. There are numerous reasons for this large decline.

  • U.S. fears of increasing Fed rates
  • Decreased liquidity in U.S. commodities markets
  • Decreased liquidity in global reserve banks for commodities
  • Corrections in U.S. and global stock and commodities
  • U.S. baby boomers liquidating or selling their investments (I find this semi-questionable)

I feel the next few weeks of equities and commodities trading will be crucial for the overall global markets. The next few weeks will determine if we will be heading continually lower, or if the correction will be coming to an end, signalling a new rise in prices.

We have already experienced a correction in the U.S., which is “defined” as a 10% drop in overall market prices. I see gold continually decreasing as this great fall in global markets has shaken and scared many investors and traders.

Are any readers buying gold? Any selling? What are your opinions?