Wednesday, December 26, 2012

Remember The February 27, 2007 Flash Crash? The Shanghai Composite Crashed As Well (CNBC)

2007 HISTORY: I found CNBC footage of the February 27, 2007 flash crash, see below. The Shanghai Composite's crash was the initial catalyst. According to the NYT, the Shanghai Composite had its "worst one-day tumble in a decade." And there were rumors floating around that "the government was considering new measures to tame the world’s hottest stock market before a bubble developed." What's funny is the Shanghai Composite then rallied 111% in the next eight months. The Shanghai Composite and S&P both peaked in October of 2007 before the great recession and financial crisis began.

According to Nanex, the NYSE completed Phase IV of its "Hybrid Market" rollout on February 27, 2007. They also said, "Note that prior to Feb 2007, the NYSE had never been a reporting exchange in any incident." And don't forget that bankers, CDO managers and mortgage arbitrage hedge funds were fueling the biggest credit bubble in history.


S&P vs. Shanghai Stock Exchange Composite, January - March 2007.

source: stockcharts.com


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