or relating to the psychology of investors

Unjustified, irrational, aberrant... The violent and sudden fall that have known the awards last week is not logical and clear explanation in the absence of new statistics. The markets seem to have lost any strength of recall, they appear to be guided primarily by technical factors (liquidation of portfolios...) or relating to the psychology of investors.

Have "hedge funds" accelerated the movement of decline

Private funding, these actors, who often resort to indebtedness, are massively selling all their assets (shares, bonds,...) to make their money or what remains investors. The market is expected to a spiralling of bankruptcy of "hedge funds" or funds of arbitration. Absence of data centralized and audited on these players, who are not required to report their performance (assets, risks...) to a regulator, the more alarmist noises travel. Some see the quarter of 8,000 to 10,000 funds put the key under the door by the end of the year. Others suggest that between one third and half of "hedge funds" would be removed in the debacle. Given the complexity of their transactions, strategies or techniques, these clearances create a major shock wave in all markets and make deciduous diversification strategies. It is the crash in the crash, one of a category of actors who grew too fast and it may be overestimated the ability to create value.

What are the technical factors that contribute to the markets slide

No study does point to a type or a style of management (quantitative...) as particularly destabilizing when markets decline. As such, the quantitative management (-based models) is not responsible for discretionary management (Manager is the only decisions). On the other hand, technical factors can exacerbate the decline in scholarships. This is the case of the famous "stop orders", those sales orders that trigger automatically when the market drops below a certain threshold. They are designed to protect the value of the portfolios. Problem, the players tend to place these orders to the same places and thresholds so that when courts reach, they perform a slide of the fact of this massive concentration of sales orders. The psychology of the stakeholders in bear markets can be as bad as in the phases of growth: excessive pessimism, herd behavior, risk aversion...

Can we close the scholarships to try to restore calm

Faced with widespread market panic, some voices are calling for closure of markets. For Nouriel Roubini, seems to be a certainty. "Don't be not surprised if the authorities are obliged to close down the markets in the coming days", predicted Thursday night the Economist at the University of New York at a Conference in London. For the moment, the rule is to promote the proper functioning of markets, therefore no interruption of the ratings on Wall Street before a diving or a flight of 1,100 points of the Dow Jones.

Come to this threshold, the operator of the stock market active circuit étrennés in the aftermath of the 1987 crash. The device is flexible since, at worst, the quotes are suspended one hour if this occurs the morning. To date, this system was used on 27 October 1997, Asian crisis. He was then sufficient, depending on the measures of the time, of two successive falls 350 points, then 550 points to put the negotiations dotted. In recent sessions, the circuit could enter in scene. And, irony of history, to prevent a strong rebound. At the meeting on 13 October, the Dow Jones index had been up to 976,80 points, a gain of 11.56.

In the past, the American places however experienced the horrors of the closure, and four days. The reason was not the madness of the markets but that of men. It was in the aftermath of September 11, 2001 and the terrorist attacks of the World Trade Center. In Europe, market companies use not circuit on the global indices but simple reservations on values. Thus, Nyse Euronext, Paris, suspends the ratings of two to five minutes when a value rectifier or progresses from more than 10. What leave a beautiful room for manoeuvre to volatility.