This Is a Flash Crash Waiting to Happen

NEW YORK (Real Money) -- The insanity of these moves off the actions by Mario Draghi, the head of the ECB, is beyond me. How could rates shoot up and then shoot back down, swinging 36 ticks, in a beat of the eye, only to go right back again? How can stocks love the ECB program, then hate it, then love it again?

I think the answer is obvious, but not talked about. Big funds that want to make moves, that want to swing around bonds and futures, are finding themselves moving whole markets with their money. Everything, even Treasurys, is trading like small-cap stocks. It's as if the brokers have had it with being anything other than order takers, and the trigger pullers have either left the building or are only involved sporadically.

Put simply, there are no two-way markets here, even markets where the brokers take down your position and then find the other side of the trade. The supply and demand don't meet where they should, because brokers don't want to extend themselves, don't want to get "in trouble" and don't want to lose money.

It is a brave and sad new world because you can make yourself wrong by taking action as we saw this very morning in the Treasury market -- the world's deepest market, for heaven's sakes.

Plus, the flows are all over the place. When bonds that traded at three and four times our interest levels are now underneath ours as is the case with Italian, Irish and Spanish 10-years, there have to be people selling them like mad and other people buying them like mad, the former to dodge currency devaluation and pick up some yield and safety, the latter to front-run the darned ECB.

It is a world turned upside down, and it's impossible to be right for the moment.

And maybe that's the disconcerting thing: "for the moment." I don't expect the brokers to come back any time soon and start "principalling" positions, or taking down stocks and bonds to facilitate trading. But I do expect that one day many buyers or sellers with real "size" do come in the market -- and it will make a huge difference.

It has all of the ingredients of a flash crash waiting to happen. The insanity and inanity of these moves wrecks confidence and wants everyone to pay less for stocks -- with the exception of the pure domestic plays. I regard it as a worrisome moment in an otherwise mixed picture, some good some bad, but all subject to gigantic swings that make me very uncomfortable as I try to adjust to this new world.

Editor's Note: This article was originally published at 10:54 a.m. EST on Real Money, Jan. 22. At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS held no positions in stocks mentioned.

Learn more about the ECB's quantitative easing program: