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Originally posted by TheCoffinman
Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:
Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.
That's pretty intense!
SHANGHAI--All U.S. stocks will probably be subject to so-called circuit breakers by the end of this year, Duncan Niederauer, chief executive officer of stock exchange operator NYSE Euronext, said on Thursday.
The circuit breakers, a mechanism to halt trading in a stock for five minutes if it falls more than 10% within five minutes, will initially apply to stocks in the Standard & Poor's 500 index under a proposal by the Securities and Exchange Commission as regulators try to avoid a repeat of the mysterious May 6 market slide that quickly spiralled out of control.
"They need to be applied to all the markets, not just some of the markets," Niederauer said, suggesting the circuit breakers also apply to exchange-traded funds, something the SEC has said may happen later.
"Our expectation is that they will be more aligned with the underlying liquidity of the individual securities, probably by the end of the year, which will be coincidental with some other changes the SEC is contemplating for revaluating the market structure of the United States on a more comprehensive basis."
For example, some stocks need to fall 10% to trigger the circuit breaker mechanism while some others only need to fall 5% or 2%, he said.