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I am not a finance guy, can someone explain why they can't freeze markets?
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I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 2:13 PM

We are all sacrificing so why can't Wall Street. The panic is destroying many people's retirements and encouraging public hysteria. So, what are the downsides to two weeks of no trading? Genuinely curious for an answer.

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 2:19 PM

Our stocks are traded all over the world, stopping trading in the US would just move trading somewhere else.

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I suppose little hope the whole world would unite


Mar 18, 2020, 2:26 PM

Especially when money is involved

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Actually, after 9/11 the US markets were shut down for a


Mar 19, 2020, 8:32 AM [ in reply to Re: I am not a finance guy, can someone explain why they can't freeze markets? ]

week in order to keep the market lemmings from cratering the market with a massive panic inspired sell-off. You know - exactly the same kind of behavior that the market lemmings are exhibiting right now. So far this sell off makes 9/11 look like a day in the park...

IMO shutting the markets down was a good idea after 9/11 and would be a great idea right now. Give the market lemmings a week to catch their breath to think and not just pure panic react to what is going on.

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Re: Actually, after 9/11 the US markets were shut down for a


Mar 19, 2020, 11:45 AM

The NYSE is a short walk from ground zero.

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 2:29 PM

If folks are invested for retirement and have a long time horizon, then they should absolutely stand pat and maintain their holdings.

If folks are invested for retirement and have an appropriate asset allocation for their age/time till retirement, then their retirement is not being destroyed because an appropriate asset allocation will have reduced their risk and volatility.

Don't get caught up in the hysteria of the major indexes swinging. Experienced investors understand that over time this will just be another blip on the way to investment success...

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 19, 2020, 7:03 AM

It’s not wise to tie all your money and future to the market. Even long-term, withstanding the ebbs & flows of the market, there is a better way. Sadly the things we’ve been “taught” about investing are mostly to benefit taxation and not the actual investor. These times are very revealing of those facts.

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 19, 2020, 7:14 AM [ in reply to Re: I am not a finance guy, can someone explain why they can't freeze markets? ]

That’s not true. All asset classes are falling in value as everyone sells EVERYTHING for cash. Even gold. The one asset that seems to be growing in value is firearms. In a panic mode, asset allocation fails.

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 2:30 PM

While suspended, your stocks have no value whatsoever. Then once trading resumes, a crash would be inevitable, as people have been terrified by the fact that, with one simple move, their entire fortune can be erased. The free market system works perfectly. Supply and demand create the proper value of everything over time. If the value of the stocks was justified prior to the crash, it will return to that value once everything settles down. You haven't lost a penny until you sell. So relax, take one day at a time. Only day traders should be concerned with what the market does daily. Retirement savings plans are a "long haul" investment. By the end of the year, you will have returned to a much more healthy position financially. Just don't get out now if you don't have to. This is the time to buy; not sell. Go Tigers!

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 2:39 PM

A sensible reply. Congrats

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 2:51 PM [ in reply to Re: I am not a finance guy, can someone explain why they can't freeze markets? ]

Excellent advice......Go Tigers!!!!

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Exactly. The fundamentals matter...


Mar 18, 2020, 2:55 PM [ in reply to Re: I am not a finance guy, can someone explain why they can't freeze markets? ]

Leave the speculation to the "traders".

"Investors" will stick with the fundamentals...

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 3:01 PM [ in reply to Re: I am not a finance guy, can someone explain why they can't freeze markets? ]

A lot of the drop is based on an expectation of reduced earnings for the next few quarters. Before the crash, earnings growth was decent and the high prices were almost justified. When we start to come out of this in 90 days or so (hopefully), the EPS will be lower and lower prices than before the crash will be justified. I held everything, and it's starting to look like a huge mistake.

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I agree with everything you said except


Mar 19, 2020, 11:48 AM [ in reply to Re: I am not a finance guy, can someone explain why they can't freeze markets? ]

"the free market works perfectly."

Clearly, it doesn't. Or at least, I wouldn't describe it as "without flaws."

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 19, 2020, 12:14 PM [ in reply to Re: I am not a finance guy, can someone explain why they can't freeze markets? ]

What he said

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The only way this is destroying anyone's retirement is if


Mar 18, 2020, 3:06 PM

one needs to withdraw a large sum from their account right now or in the very near future. If your retirement is a ways off, then there's an excellent chance that the market will go back up (it always does). If you are retired or very near retirement, you shouldn't have too much money in the stock market, thus at risk, anyway.

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"Democracy is the theory that the common people know what they want, and deserve to get it good and hard."
- H. L. Mencken


By my count, this is my 4th rodeo


Mar 18, 2020, 3:12 PM

I went from "the sky is falling" and panicking in 1987 and also 9/11, to "oh well" in 2008 and now this week. I would be disingenuous if I said that I was not worried for us all, but our country does have the best economy, and we are free (with our free markets). Our economy was good but not great as it has been described as "the cleanest shirt in the dirty clothes hamper".

To freeze the market would create a panic as people would not have access to their money. It is important that the markets function, and function without glitches. We had that in both 1987 and 2008.

My response in 1987 was to take some off the table and those take a loss, which I still regret, but learned from. In 2008, when my accounts all went down over 50%, I upped my purchases and bought my way back out.

Today looks like 9/11 in someways, but different in others. While the economy may have felt a bit overheated, it was covid-19 that has started this. Another thing, the oil crisis is not being discussed much, but we have now topped off our national reserves with cheap oil. Many of our shale companies will not make it, which is what Putin wants, and is why he set off the pricing war. We have been in an economic war for a very long time with China, Russia and others.

I am looking for several things but here's a few:

1) A cure for covid-19, not guaranteed, but we remain hopeful.

2) Both parties working together and putting their pettiness aside. It is very hard for me to be confident in my investments and the economy if one party (either) is hoping for recession in order to take control. Bill Mahr is probably a happy guy right now, and we are just "collateral damage" at this point.

The global economy will be a drag in all of this. Keep an eye on the European Banks which are not well capitalized. Keep an eye on our southern border, if Mexico has a major covid-19 crisis. It could get interesting and it could take longer for us to get out of this. I'm leaving so much out as we live in a complex connected global society.

Finally, we are a very resilient nation, and we tend to be our strongest when we are staring down a serious crisis. It is a wake up call that we all need each other, and always have. Be thoughtful to others in all of this, and give them grace, that we may also get grace.

Keep the faith, and keep safe.

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Bravo.


Mar 18, 2020, 5:14 PM

The data shows that most of those who pull out into cash do so too late, and get back in too late, missing the run up. I learned my lesson in 2008. I'm riding it out.

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"Dabo crushed my soul." --- Classof09


You'd also be freezing access to capital for businesses


Mar 18, 2020, 5:07 PM

if you froze the markets. In addition to all of the reasons already mentioned, it would be pretty devastating to shut them down for a couple of weeks.

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"IDIOT POSTER OF THE MONTH SO FAR...GWP-- You have won IPM Award for your failure to completely comprehend a clear post & then choose to attack someone who points out your ignorance. While you are not yet in the same No Class Catagory as deRoberts, ClemTiger117 & Tigerdug23, you are getting closer to the Sewer Dwellers." - coachmac


Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 6:02 PM

there just isn't really any way of doing that, short of the government falling. they were able after 9/11 to shut the markets for 3 days, but that was mostly because there was actually damage to Wall Street and the infrastructure just wouldn't let trading go on.

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 18, 2020, 7:19 PM


We are all sacrificing so why can't Wall Street. The panic is destroying many people's retirements and encouraging public hysteria. So, what are the downsides to two weeks of no trading? Genuinely curious for an answer.


The last place in the world you should want to come for finacial advice is TigerNet??.

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ClemTigs


Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 19, 2020, 12:58 AM

The stocks bonds and cash in an investor’s portfolio belong to the investor. No third party can “freeze” those assets. You can’t freeze other assets that we own, ie property or vehicles. Not gonna happen in the US. Only in banana republic w dictator. Equities have the “inherent risk” of plummeting. If an investor can’t take the heat, they will leave the kitchen. This is one of the beauties of America, we have the freedom to make our own financial decisions.

Currentcdituation is not market hysteria. Market is seeking data, but not gettin it. Markets will not recover til we see glimmer of light in number of “known cases” beginning to flatten out. Market will not pay any attention to Trump. Market only interested facts and in fhis case it’s one single fact, the trend for “known cases”. Once that happens, then we will go back to earnings, technical data and securities analysis.

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Great answer. Thanks!***


Mar 19, 2020, 7:41 AM



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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 19, 2020, 7:55 AM [ in reply to Re: I am not a finance guy, can someone explain why they can't freeze markets? ]

Big House - I appreciated your post. This is one of questions I had last night while I was taking to my wife about CVD19. Seeking Data. I Was Thinking about it in the form of criteria. For instance in SC the governor canceled school for the remainder of the month. I have no issue with that. But everyday we get closer to 4/1. What is the criteria for suspending school for the first week in April, and so on. We are trying to flatten the curve, rightfully so. But the volume under the curve flatten or compressed, is/ will be the same? I think markets would start to calm if there was some data/ plan that could be presented saying we started hear on our journey. We are doing these actions to produce this response. Once we achieve that response we will be on this next leg/ phase of the journey. I know that exact answers can’t be provided, but I have heard the climate could last 2 weeks and 18 months. I guess that is the data we have right now. Fun times.

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Re: I am not a finance guy, can someone explain why they can't freeze markets?


Mar 19, 2020, 9:17 AM

I fully agree, the market, and all of us seek data, a plan, information, response details, etc., but since we are in such uncharted territory I personally don’t think the market can bank on anything except one single data point and that is the number of “known cases” beginning to level off. The brutal reality is we don’t know if that’s weeks away or months away. Maybe I’m wrong, but I think the market is behaving very rationally.

Back to OP’s original question, while we won’t freeze markets, one person mentioned a move to ban short selling. On the surface that sounds reasonable, but keep in mind a short sale has two components. First the investor sells the stock, then they are obligated to buy the same volume of the same stock to satisfy the delivery of the sale component. So if we ban short sales we remove one substantial element of the market which is quite a few future commitments to buy. I’m not sure if this would be good move or bad move.

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Shorting, offshoring the profits, then claiming insolvency..


Mar 19, 2020, 9:37 AM

There's a lot of crooks on Wall Street, obviously not all but some... They're trading on actuarial algorithms at this point.

I certainly hope the SEC/FBI has a grip on it.

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Re: Shorting, offshoring the profits, then claiming insolvency..


Mar 19, 2020, 10:41 AM

SOLOS, What crimes do you feel the SEC / FBI should monitoring? Using algorithms? Buying? Selling? Short selling?

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If they freeze markets, people can't get to their money.


Mar 19, 2020, 11:31 AM

They are forcing people to leave their money invested in corporations instead of getting it out for emergencies.

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Re: If they freeze markets, people can't get to their money.


Mar 19, 2020, 12:18 PM

Nobody is being forced to leave their money invested in corporations instead of getting it out. You can sell anytime. Markets are not and will not be frozen. If you don’t like the current sell price u should have chosen a different asset. Can’t have your cake and eat it. We all had full disclosure.

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I'm responding to the OP. He asked about a market freeze.


Mar 19, 2020, 12:58 PM

Follow the thread.

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Re: I'm responding to the OP. He asked about a market freeze.


Mar 19, 2020, 9:02 PM

Follow the facts. You can sell at anytime. If you don’t like the price (even if zero) you shouldn’t have been in the stock market.

The concept of freezing the market is beyond communist. Not gonna happen here.

I smell Trumpers unaware of their socialist tendencies when the going gets rough.

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