May 7, 2010
USA Today: “The Machines Took Over (Wall Street)”
Source: USA Today print edition, 07-May-2010 (Scan of front page from Politico.com)
Bombs away, Wall Street babies. If you were watching the epic fail of Wall Street yesterday (06-May-2010) in its final hour of operation, you would have seen what has to be the biggest WTF ever. Beginning about 2:30 pm EDT and lasting for 15 minutes, The Dow Jones nose-dived 700-1000 points, nearly 11% of its value, before recovering to close only 348 points off its opening. At a time when Wall Street is already under scrutiny for financial shenanigans resulting in the mortgage crisis, this major fubar could be what Obama and Congress needs to put bankers on a very short leash with a choke chain, even as this drop is now being investigated.
Somebody set up us the bomb! What happened yesterday is identical to events surrounding similar Dow drops, with events in Greece being “triggers:”
(USA Today online) In a late-day plunge eerily reminiscent of famous Wall Street stock market meltdowns in 1987 and the fall of 2008, the Dow Jones industrials nosedived almost 1,000 points in a volatile day Thursday that began with heavy selling on Greek debt fears and was followed by a waterfall decline that was allegedly caused by erroneous trades and “unusual trading activity.”
Before Thursday, there were riots in Greece as that government announced pay cuts and tax hikes to deal with their economic collapse. Coincidence?
Program error detected between keyboard and chair. The main suspect in yesterday’s fail are the computerized trading systems used, and a the possible input of one person:
“I think the machines just took over. There’s not a lot of human interaction,” said Charlie Smith, chief investment officer at Fort Pitt Capital Group. “We’ve known that automated trading can run away from you, and I think that’s what we saw happen today.”
So the crash was just a lemming cliff-dive parade due to a ID-ten-plus error that went unchecked. The stocks that suffered the worst did recover, even though Wall Street remains nervous. And the invalid transactions that occurred during the period will be nullified. No AIs or hacks, other than an errant input.
But given Wall Street’s past handling of such events, they will just keep the systems running until the next errant input won’t be checked… or be an accident.
Comments
May 7, 2010
Traclo said:
God you could make a lot of money if you knew these kind of things were about to happen.
Which raises an interesting point that I hope to see revealed in the investigation; who made money off this?
May 8, 2010
Proxy said:
No offense, but after the use of “epic fail,” I just stopped reading the rest of this entry…
Mythrandia said:
Michael Osinski made alot
Joe McMoneagle said:
The ghost of Brian Sato is responsible for this
May 9, 2010
CyberFusion said:
I thought the exact same thing proxy.
The stock market is just going to crash one day and they (wall street) will just blame the machine and not the people behind it, I guess everyone is so used to the idea now anyway. Im also thinking a staged cyber attack could cover-up a stock market crash like what happened in 2001 with wall street being shutdown for a week after 9/11.
But don’t worry Obaamaa will save us all!
autopilot said:
“But don’t worry Obaamaa will save us all!”
Reasonable, intelligent man in the White House no!
May 27, 2010
0m1kr0n said:
With the layout of wall street it would of took insightful human collaboration to intentionally pull this off. I think they are just blaming software. Accountants collaborate with software engineers on the design of internal software implementations.
Investment bankers make money off of failure, even of the economical downfalls of their own countries, they are getting over with the real estate epidemics and such..
May 19, 2012
shaziya khan said:
great bt if obaamaa will save as all
shaziya khan said:
shaziyakhan says that you can do it any other problam bcoz u r great man in the world