Dow Jones and S&P 500 to merge?

www.chicagotribune.com...

The companies that own the two indexes are in talks to merge. CME Group and McGraw-Hill are looking to benefit by the merger by having more sway over world markets. McGraw-Hill would have majority control of the joint entity. Apparently there negotiations have been going on for over a year but this is the first I have heard of it. I personally think it would be easier to manipulate one market index as opposed to two. I also think it will become impossible to have apples to apples comparison between current and past market activity after the merger. This could make it easier to hide the financial hole we are in from the sheeple.

And the welding of the new world order ignites.

They are just mathematical calculations anyone can do. The formulas are available online if you want to check them. Just because one company "owns" the calculation does not mean they "control" it. If they change anything it becomes immediately obvious to anyone paying attention. These aren't secret numbers or calculations. You don't even need the companies to calculate the averages. It's just that they invented the formulas in the first place.

Anyone care to comment on this S&P 500 story?

Open Interest in Shorting the S&P 500 Index in October has climbed to over 2,250,000.

www.moneyteachers.org...
www.cboe.com...

Personally I only understand enough about this aspect of trading to think that, assuming this is legitimate, something is very wrong as I believe the norm would be in the neighborhood of 20,000 contracts. Not well over 2 million.

Originally posted by paulmasoner
Personally I only understand enough about this aspect of trading to think that, assuming this is legitimate, something is very wrong as I believe the norm would be in the neighborhood of 20,000 contracts. Not well over 2 million.

Very right, you are... The thing with shorting (for those who don't know) is that the value of your trade goes up if the market goes down. Basically what happens is that you "borrow" someone's stock, sell it, and then have to buy it back at a later date. If you short sell a stock at $50, and it drops to $30 when you buy it back, then you just made a $20 profit per share. But shorting is very risky as you can lose more than you put in. If you short sell a stock a $50 and the value goes to $200, you just lost $150 per share, 3x what you put in. So, to see a large increase of shorts is very pessimistic for the market.

However, I'm not sure I agree with the assessment to buy gold and silver (at least not now). See, if the market tanks, the value of the dollar would skyrocket (they have an inverse relationship), making the value of gold & silver plummet also. If you want to buy now, then do so, but you could potentially pick it up at a lower price later. Or, the price of gold & silver could skyrocket also. It really depends on how investors react, if they flock to the dollar as safety, or put their funds in hard assets like gold & silver.

reply to post by mossme89


Agreed on the gold and silver. I own both. We were going to buy last week when everything first tanked, but I just have this feeling that right now is not the right time to make ANY moves.. buy or sell. We knew when we started buying that this was a long term investment. I think its going down more, so I'll just wait it out before buying anything.

As far as the merger goes, I'm not sure that will happen. But, if it does, I think it will be a bad move.