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Is fast crash likely? Pt. 2

General discussions of the systemic, societal and civilisational effects of depletion.

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Is fast crash likely? Pt. 2

Unread postby Pops » Tue 14 Sep 2010, 17:30:54

Does this make anyone else nervous - I mean the part about no one seeming to know what is happening?
It has been about a week since we have had a flash crash in our broken markets, and we were getting a little antsy. Then Nucor showed up and traded at $0.01. At 11:52:21 something broke, and as the QR chart below shows, it was basically precisely the same algo malfunction that either goes and hits all bids all the way to zero, or some HFT decided to shut down, and wipe out the entire bidside orderbook. The stock which had been trading at $39.58 literally milliseconds earlier, saw a SkyNet T-1 unit go berserk and take out the bids at $37.22, and $35.77 in sequential fashion, with the next trade being at at the residual stub quote of $0.01.

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Re: Flash Crash, WTF?

Unread postby Revi » Tue 14 Sep 2010, 18:50:25

I love Zero Hedge.

There was another article about the fact that gold and silver markets seem to be going up and up.

We are in some interesting times.

We could see some very nasty October surprises.
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Re: Flash Crash, WTF?

Unread postby DoomersUnite » Tue 14 Sep 2010, 19:39:00

My vote is for SkyNet awakening.
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Re: Flash Crash, WTF?

Unread postby eastbay » Tue 14 Sep 2010, 20:10:31

Within the past day or two I read an interesting and thought provoking article or blog detailing the mechanics behind and explaining the powerful likelihood of a one hour complete worldwide financial meltdown and how it will occur ... and that it will occur within a year or so. And that it will be a complete surprise to nearly all.

But I can't remember where it was ... maybe someone else here read it too?
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Re: Flash Crash, WTF?

Unread postby Rod_Cloutier » Tue 14 Sep 2010, 21:19:50

Can't forget all those nasty computer viruses out there. We had one at work last week that took the company's whole network down for hours.

I can only imagine what banks and other financial companies must have to put up with to stem computer invasion and fraud??

I'm sure there are hundreds of computer savvy people out there trying to convince their banks computer system to move a few decimal points around in their favor daily.
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Re: Flash Crash, WTF?

Unread postby Tyler_JC » Tue 14 Sep 2010, 22:48:56

Has your computer never crashed before?

I'm not surprised that the stock market has occasional glitches. I'm surprised how rare they are.
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Re: Flash Crash, WTF?

Unread postby Ibon » Tue 14 Sep 2010, 23:54:22

1) Never underestimate resiliency
2) Parasites don't kill but only weaken their hosts
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Re: Flash Crash, WTF?

Unread postby peripato » Wed 15 Sep 2010, 03:16:49

Ibon wrote:1) Never underestimate resiliency

I don't think this applies in a globalised world, where old competitors are now peers.

2) Parasites don't kill but only weaken their hosts

The host is already weakened. Unserviceable debt, the scourge.
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Re: Flash Crash, WTF?

Unread postby peripato » Wed 15 Sep 2010, 03:22:40

Tyler_JC wrote:Has your computer never crashed before?

I'm not surprised that the stock market has occasional glitches. I'm surprised how rare they are.

I believe the Plunge Protection Team may something to do with it.
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Re: Flash Crash, WTF?

Unread postby NickyBoy » Thu 16 Sep 2010, 03:32:16

Tyler_JC wrote:Has your computer never crashed before?

I'm not surprised that the stock market has occasional glitches. I'm surprised how rare they are.


Critical software has additional testing, specifications and oversight that is considered too expensive for anything intended for general PC use.

The design phase will use predicate logic systems to remove specification ambiguity, the development phase will be subjected to a system of mathematical testing (both compartmentalised and over the solution as a whole) to ensure no combination of functions or elements can produce errors and the final product will pass through more conventional testing with a far greater duration than anything that is used on your PC.

The implementation of said software will also have significant physical resilience. Multiple simultaneous failures ,both of individual components and entire server systems, are expected and protected against with redundant hardware that is aware of the state of the primary systems at all times and can pick up where they left off in a process that is completely transparent for anything accessing the service.

In comparison 'your computer' is a joke.It is built and coded by people who would be considered talented amateurs in a more mature profession with a recognised professional body of accreditation.

Sorry for the rant. Financial software is my thing and 'just a glitch' is enough for heads to roll and jobs to be lost.
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Re: Is fast crash becoming more likely?

Unread postby Outcast_Searcher » Fri 01 Sep 2017, 12:03:34

donstewart wrote:@outcast and asg
The Zero Hedge article quotes the Bible, which I also reference. Why don't you go all the way and label the Bible as 'doomer porn'?
Don Stewart

Really. So you're going to claim that calling zerohedge doomer porn is inaccurate?

What next? That purple unicorns rule the universe?
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Re: Is fast crash becoming more likely?

Unread postby Outcast_Searcher » Fri 01 Sep 2017, 12:06:45

shortonoil wrote:
When a similar graph was posted before no one was able to explain to me how the model could hold true when the actual price was so much higher than the allowable maximum price*, not just by a month or two but by at least 18 months.


The Maximum Affordability Curve is based on the average yearly price of WTI as reported by the EIA ($/barrel).

Code: Select all
        MAC      EIA
2010    118.44   87.48
2011    112.14   71.21
2012    104.58   94.05
2013     96.18   97.98
2014     87.36   93.26
2015     77.28   48.67
2016     65.94   43.33
2017     54.18
2018     41.16      


The Maximum Affordability Curve has not been exceeded by the price of WTI since the inception of the series in 1960. Below is a graph of the full series calculated in 2014. The series is the 38% curve (shown as a series of pink squares) or the curve that passes through the energy half way point in 2012. The series are shown as points (pink squares) because they are skewed logistic curves that have no explicit mathematical function to define them. The points are calculated numerically.

http://www.thehillsgroup.org/depletion2_020.htm
http://www.thehillsgroup.org

click to enlarge

Since when does the price of production increase constantly and expenontially? That would seem to fly in the face of reality. (The blue line).
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Re: Is fast crash becoming more likely?

Unread postby Cliffhanger1983 » Fri 01 Sep 2017, 12:08:01

Just wait until we experience a 10% or 20% drop in oil supplies. In a few years or sooner we certainly will. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently.
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Re: Is fast crash becoming more likely?

Unread postby donstewart » Fri 01 Sep 2017, 12:09:25

@outcast
I don't care to label Zero Hedge, and don't really give a flying **** how you label it. I referred to an article which was reprinted by Zero Hedge. The article quoted the Bible. In my reference, I stated my partial support of the article, but also noted my reservations in terms of the accounting identities involved in a fully financialized system. I also noted the quotation from the Bible. I do agree with the Biblical quotation. I presume you don't agree with it.

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Re: Is fast crash becoming more likely?

Unread postby shortonoil » Fri 01 Sep 2017, 12:10:47

The Maximum Affordability Curve is a calculation derived from the Etp Model which allows for the determination of the monetary value of the energy received by the end consumer for a barrel of petroleum that meets our standard of 37.5° API crude. The basic hypothesis is that once the maximum affordable price of oil for the economy is exceeded that a reduction in economic activity will result in pushing the price back down to the curve. The time period for that to occur was established through additional research into changes in GDP growth rates versus the relationship to changes in the price of oil. The EIA's annual price reporting of WTI prices fits well into the derived time period. The conversion from energy units (BTU to nominal dollars units was accomplished by using data provided by the EIA and the World Bank.

http://www.thehillsgroup.org/depletion2_008.htm
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Re: Is fast crash becoming more likely?

Unread postby shortonoil » Fri 01 Sep 2017, 12:24:23

Since when does the price of production increase constantly and expenontially? That would seem to fly in the face of reality. (The blue line).


Since at least 1960 when the EIA started to report it.

If you have a better function with a better correlation coefficient please post it. Otherwise, we will have to assume that you are having another argument with your own eye balls! That must be terribly disconcerting? It would put you into the "bat shit crazy" category!
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Re: Is fast crash becoming more likely?

Unread postby Outcast_Searcher » Fri 01 Sep 2017, 12:34:17

shortonoil wrote:
Since when does the price of production increase constantly and expenontially? That would seem to fly in the face of reality. (The blue line).


Since at least 1960 when the EIA started to report it.

If you have a better function with a better correlation coefficient please post it. Otherwise, we will have to assume that you are having another argument with your own eye balls! That must be terribly disconcerting? It would put you into the "bat shit crazy" category!

Ah, the usual intelligent mode, where you call people names. Does this sell lots of ETP pamphlets, by chance?

So you're ignoring the data where oil fracking production costs are dirt cheap then? Because that doesn't count? Because it doesn't fit your ETP meme?

Why does asking a question get you so upset? Why do you so rarely conduct a back and forth conversation (which is very common on this site) like an adult?
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Re: Is fast crash becoming more likely?

Unread postby shortonoil » Fri 01 Sep 2017, 12:34:51

Since you so conspicuously failed to notice or comment on my graph, I will ask you explicitly: Don't you think this DEATH CROSS is a bad sign for future oil prices? I await your thoughtful answer.


It has been regarded as a likely breakdown point in a market by the financial community for the last 100 years. It would seem rather foolish to ignore it; but when you are dealing with a fool they have a tendency to be foolish! It comes with the territory.
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Re: Is fast crash becoming more likely?

Unread postby shortonoil » Fri 01 Sep 2017, 12:41:34

So you're ignoring the data where oil fracking production costs are dirt cheap then? Because that doesn't count?


Yes, because they are using EBITDA numbers, and not profit and loss numbers. On a profit and loss bases they are losing their shirts, sneakers, shorts ... etc.

click to enlarge
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Re: Is fast crash becoming more likely?

Unread postby shortonoil » Fri 01 Sep 2017, 12:45:16

You lose.


His mother didn't get much out of the deal either!
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