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Share Market Crash 2011 10/08/2011 :
Circumstances are far different as, in 2008, stocks crashed based on a nearly insolvent banking system and a domestic economy in contraction. Today, in 2011, the banking system is liquid, and our economy is growing — albeit, at a moderate pace.
In 1987, similar to now, the machines took over.
Twenty-four years ago, it was portfolio insurance that delivered the toxic blow. Today, it is high-frequency traders that are motivated not by fundamentals but by price momentum. Add super-reverse ETFs to the mix and a lethal cocktail has been served, rendering our markets temporarily dysfunctional and contributing already to an October 1987-like crash.
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