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  Jim Kingsland

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  10/19/12

  Was the Google lesson enough for everyone yesterday?  As I’ve long said, Wall Street is an entertaining place. Yesterday’s hilarity ensued after some poor soul at RR Donnelly released Google’s earnings during the middle of the day – results that were weaker than expected – though to a casual observer would look strong. The stock tumbled, going from the 750’s to a low of around 680 before it was halted at the company’s request.

  To make a long story short, what was witnessed with Google is what will happen with the broader stock market – it too will be hit with some sort of news, bids will disappear and the powers that be will have no other choice but to halt the market. If they have to, they (the PTB) will keep the market closed for as long as they wish. Paper assets known as stocks will be trapped – no matter whether the certificates are in held in one’s own hand, but more than likely held by a custodian.

  The system merely hammered Google because it disclosed the truth 5 hours earlier than expected. I for one am not looking forward to whatever other truth comes out to hammer individual big names in the future, or to the market as a whole.

  Google also came in for a nearly 10% one day pole axing because it is more than likely that many had not completed executing their hedges before  what should have been a post close earnings release.

  Google is a reminder to hedge your paper market positions with something outside of the stock market casino – again that points to hard assets. Metals, certain real estate, diamonds, etc.  

  To put what happened yesterday into a picture:

   

  The losers in yesterday’s fiasco are calling on the SEC to investigate. Maybe they will, but I suspect it will be life as usual on Wall Street.

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  Bill Gross likes to tweet.  Here’s one from this morning:

  Gross: The crash on Oct 19 1987 showed that portfolio insurance puts were dangerous. R central bank “puts” in the same category?Very likely.

  Something to think about.

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