Trading Error at Major Firm Blamed for Market Plunge: Sources

[sabra]

Source: CNBC

BREAKING NEWS: Trading Error at Major Firm Blamed for Market Plunge: Sources (Story Developing)

Read more: http://www.cnbc.com/

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[DJ13]

1. Hmmm... didnt Goldman Sachs claim to have software that could do this same thing?

[Chemical Bill]

21. They said they have software that someone else could use to cause trouble.

Why would they admit to (potentially) causing problems themselves?

Bill

[Blue Meany]

2. Maybe this is Wall Street's way of firing a shot over the bow

of Congress, to show what they can do if they go through with their reform effort

[Supersedeas]

10. Just letting the little people know who really PULLS the strings of Oligarchy

[bergie321]

15. That was my first thought

When I heard this.

[doc03]

3. What about the poor smuck that got caught up it that

error.

[Beavker]

4. Case in Point

One friggin firm can bring down the market...error or not.

[edbermac]

5. Another argument for why we don't need financial reform.

:sarcasm::sarcasm::sarcasm:

[benld74]

6. What did you learn your first day on the job? UH,, Don't touch this red button? NOOOOO!!!!

[Joanie Baloney]

7. "Darn it!"

"I'm always getting my "b's" and "m's" confused!!

Kinda basic there, Sparky...billion is bigger than million...repeat after me.

Sheesh!

[LanternWaste]

8. I'm one of the the first to attribute...

I'm one of the the first to attribute an aberration to human stupidity/error rather than conspiracy.

But then again, I'm not part of the cool, cynical set. :P

[ocd liberal]

9. Hilarious!

Yesterday, Morgan Stanley Smith Barney cut me after 19 years. see? see?

[proudohioan]

11. Karma works in mysterious ways........... n/t

[Ikonoklast]

13. And they replaced you with some bad software.

Gotta love it.

Some day CEO's will be replaced by computers.

[tomhayes]

12. So the market really is just a game??

Who knew??

[Prometheus Bound]

14. Current Title: Stock Selloff May Have Been Triggered by a Trader Error

I note the words "MAY HAVE BEEN"

[bergie321]

16. Can we outsource

Can we outsource Wall Street to India?

[eilen]

17. He will probably get a big bonus next quarter. nt

[AllentownJake]

18. Yeah...a trading error

:rofl:

[Odin2005]

19. Liars!

[CHIMO]

20. Seems

Like a trading error pushed the computers to do their thing?

So all the big guys are basically using the same program.

Now how do I ....

[northzax]

22. well, it's easy, really

all you need is a couple billion dollars (or credit to that amount) a willingness to lose it all, and probably commit several types of very serious fraud along the way.

basically, what it looks like is that a trader mis-priced a couple billion E-mini S&P futures (16 billion of them moved in a couple of minutes). at roughly the same time, something odd happened to Proctor and Gamble, which dropped 37% in two minutes. since P&G is a DOW component, and a lot of computerized trading involves the DOW (including probably some mutual funds you own) computers scrambled to readjust their portfolios. At the same time, other computers followed their algorithms that saw P&G as an industry bellwether, and adjusted. all of this happens in seconds. at the same time, the S&P 500 linked trading computers were doing the same thing. then the humans started to get involved. Since the US market is already on edge, given the European crisis, people saw a fall coming and wanted to make sure they were ahead of the game, and cashed out, just in case something was going on that they didn't know about. but when you see a drop of 400 points in a matter of minutes, you want to sell NOW and wonder what happened later. then, about fifteen minutes later, people came to their collective senses, and realized that nothing all that bad had happened, saw good buying opportunities and started to get back in. yes, it's this fast. scary fast.

[TeeYiYi]

23. Something crazy happened today...

... My dad had an order in place to sell one of his stocks at $7. They sold it all at .02 cents. Not good.

TYY

[conspirator]

24. Casino. Casino nt

[bemildred]

25. So, basically, some tool of a gambler at some monitor somewhere can crash the market. nt

[lurky]

26. Implications: If an individual can crash the market, even briefly,

then an individual can short a bunch of stocks and intentionally crash the market, enriching themselves in the process. Of course, it would be pretty obvious what happened, so they would probably go to jail.

A more likely situation, I think, is that one of these individuals could be bribed, blackmailed, or extorted to crash the market by shady characters holding short positions. In fact, this seems kind of inevitable given the billions of dollars that could be made in a matter of minutes.

Opinions?

[defendandprotect]

27. k

[Bonobo]

28. "A 'B' instead of an 'M'"!!! OMG, how fucking STUPID do they think people are!?

Let me get this straight, the cause of the 1,000 point drop was because someone entered a B instead of an M, so what was intended to be "millions" was registered as "billions"???

And we are supposed to believe that? We are supposed to believe that despite the millions of trades that have occurred, this ISSUE has never come up before?

PUH-LEEEEEEEZE!