Somebody Should 'Hang' the NYSE: Jim Rogers
Published: Friday, 7 May 2010 | 7:31 AM ET Text Size
By: CNBC.com
The suspected erroneous trades that exacerbated the Wall Street's fall on Thursday should be investigated and solutions must be found if the New York Stock exchange is to maintain its reputation, investor Jim Rogers told CNBC late Thursday.
The Dow ended Thursday's session down 3.2 percent, at 10,520.32, after being down as much as 998.50 points earlier, the index's biggest intraday drop on record.
According to regulatory officials, "a huge, anomalous, unexplained surge in selling" happened at about 2:45 p.m. New York time, setting off trading based on computer algorithms, thus amplifying the fall.
"Somebody should hang this New York Stock Exchange," Rogers said. "They claim to be the center of the world's capitalism, of the world's financial markets, you would think that in 2010 they could sort out simple things like electronics."
The New York Stock Exchange is investigating the cause of the possible erroneous trades.
But any tech problems alone are not to blame for the whole of the collapse as a decline was overdue, he added.
"It's time for a consolidation, there's always a reason for consolidation when it comes, the market went up for 13 months in a row, now we're going to, you know, correct for a while," Rogers told CNBC. "In my view the correction should have started sooner."
Rogers said he was long the dollar and the yen but "unfortunately" he was also long the euro, which economists predicted will collapse.
"You never have enough shorts when things collapse," he said. "I think people should be looking for shorts or defensive positions because we're going to have problems for a while, at least in my view."
Giving money to Greece will not solve its problems, it will only postpone them, as liquidity injections in other parts of the world have done, Rogers warned.
"As I've been saying to you all before, 2010 and 2011 are going to be years of currency turmoil not just in Europe but all over the world and Greece is bankrupt," he said.
"We can paper it over for a while, just as we papered over some of the problems in the US and the UK but the problems are going to come back," said Rogers.
Correction: A previous version of this story said a "glitch" at the New York Stock Exchage caused an accelerated selloff. This version makes clear the cause for the sudden surge in selling is unknown, but that erroneous trades are suspected.
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