P & G

At my age, twice in a day may be dangerous. But what happened this evening with the US markets has by any standard been a bit of fun, most certainly a bit of history, and deserves a second post.

I’m watching the pundits on CNBC doing what they do best, twenty-twenty hindsight. It’s a really busy evening: in three minutes the first results of the UK general election emerge (Cameron will win easily, Labour will get killed), three people got killed in Greece yesterday, and three large cap stocks, Procter & Gamble, 3M, and Accenture, got killed on the stock exchanges today.

First, the fuss was all about how worried US markets were about the Greek budget deficit. That was the cause of the Dow collapse, one thousand points in a New York minute. Out of eleven thousand, that’s a lot. Same on the Nasdaq. Petrified by the Hellenic mayhem. Soon after, someone with a molecule of common sense realized that when Accenture dropped from 40 bucks to a penny, there were only so many Greeks you could blame. A few minutes ago it transpired that Boston Beer (ticker SAM) also took a dive down to penny stock before zinging back up to around sixty dollars.

These guys make great beer, and a couple of years ago in Providence RI I did the rounds of a large table of Chinese with a waiter, to make sure the menu wasn’t lost in translation, and whenever I asked the good people of Qingdao, Ningbo, and Xiamen what they would like to drink with their meal, I was invariably met with a raucuous cry of “Sam Adams”.

Accenture goes south

Why would the Boston nectar concern itself with a Greek tragedy? It wouldn’t. Well, I hate to get quantitative, but the chart shows the real tragedy. Accenture, which was once called Arthur Andersen, before screwing up big time, rebranding itself and famously hinging a massive ad campaign on Tiger Woods, before he screwed up big time, took another trouncing today. Just before 3pm eastern, like a seal diving deep in the Wedell Sea, the stock reached one penny. What I love about the chart is that the day’s low is reported as $41.05. Er… no. It really does look as if the stock touched zero. The one penny value would be called the detection limit in analytical chemistry, meaning that you can’t accurately measure below that. One or less.

The tumble on the reported daily low would be infinite, any number divided by zero. In the melee, gold took off and reached twelve hundred dollars.

What on earth did all this have to do with Greece? Nothing. Electronic trading on the NYSE, aka computers, associated to man-made security measures introducing trading delays, and phase lags across exchanges, did it all. Apparently fat fingers were involved. Whatever happened will never be explained with any certainty. If you read these chronicles from time to time, you know what I’m getting to: non-linearity strikes again.

To add to the fun, the euro has been tanking. Obvious to all except everyone else, the European dirty linen washed in Brussels and hung out to dry on a German clothesline gave off a bit of a stink. But listening to the US financial commentators speculating (excuse the pun) on the small country of Greece being forced out of the single currency is a joke in itself.  When the euro hit Europe in 2000, it was pegged at 1.18 with the greenback, sank down to parity, and promptly speculated down to 0.86. While pundits in the city of London commented on its imminent death, it happily made its way up to a dollar twenty. Then thirty. Then forty. Then fifty.

Tonight it’s nudging 1.27, and the Germans are in despair at the weakness of the currency, although it will be a godsend for EU exports. One year of this and we’ll see about budget deficits. And the US economic recovery. Tomorrow the markets will rock ‘n roll. And it’s Friday. Weird things happened today, and the weirdest was humans justifying the behaviour of computers. Computer says no

P & G. Portugal and Greece? I think not.


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