Courtesy of Pam Martens
Wall Street Mega Banks Are Highly Interconnected: Stock Symbols Are as Follows: C=Citigroup; MS=Morgan Stanley; JPM=JPMorgan Chase; GS=Goldman Sachs; BAC=Bank of America; WFC=Wells Fargo. (Source: Office of Financial Research, February 12, 2015.)
By Pam Martens and Russ Martens
At 10:52 a.m. yesterday, the Dow Jones Industrial Average which was trading at a level of 29,348, began a bungee-style plunge. By 11:32 a.m. the market landed with a thud at a level of 29,013. Then the stock market began an equally inexplicable climb, closing the day down just 128 points. This is what is known as a “Flash Crash,” a sudden plunge in the market with no reliable explanation. No one on Wall Street has yet to offer a convincing explanation for the plunge. An early attempt to pass it off to worries about the coronavirus was easily dispelled because the news report of rising infections from the virus came much earlier than the plunge in the market.
Our chart research also shows that the plunge was not related to the coronavirus because Procter & Gamble, a component of the Dow which is having serious supply chain disruptions from the coronavirus, didn’t participate in the Flash Crash in any material way.
Goldman Sachs, however, also a component of the Dow, not only participated in the Flash Crash but began its own plunge at the market’s open, recovered somewhat, and then began the Flash Crash at the same time as the Dow – but much more sharply.
James Gorman (left) Chairman and CEO, Morgan Stanley; David Solomon (right) Chairman and CEO, Goldman Sachs
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