Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, March 1, 2007

What Went Wrong with the Stock Markets?

Investors' concerns about the declining subprime lending industry (home mortgages to people with bad credit ratings) is the focus on the New York Times' analysis of what went wrong with the stock markets on Monday, in Soothing Words and a Stock Market Rebound , as well as concerns about a slowing down of the US economy (i.e., recession), in Commerce Department Says U.S. Economy Is Weaker Than Expected. Fed Reserve Board Chair Bernanke, however, told Congress he's not worried, see Bernanke Not Worried About Market Drop.

In addition, the NYSE's inability to handle the high level of trading volume may be attributed to its cutting back on floor traders and replacing them with an electronic trading platform.  The SEC is making an inquiry.  See WSJ, NYSE's Trading Overload Draws Attention of the SEC.

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