Computer Glitch Causes Havoc and Losses on Nasdaq

goombah99 writes "In an illustration of how fragile the electronic stock market system is the NY Times is reporting how a tiny computer glitch rippled through the Stock Markets with buyers who bought low and sold high taking huge losses. An erroneous large sell order was entered. Many people bought at this low price, then signed options contracts to sell these at higher prices, locking in a profit. Or so they thought utill the erroneous low sell order was removed. Now to honor their options they had to buy the stock at a higher price. Since exchanges trust each other's trade prices it rippled throughout the system. There does not seem to be any way to gracefully undo such errors."

Comments

this obvious, repetitive troll should be auto -1

[NSash]

Whoever modded this +1 funny should never get any mod points again... ever.

Re:Haha

[mlrtime]

I'll probably be modded down for this, but linux is more susceptible to bugs than the software that runs nasdaq ie os/390 & vms.

Re:Bound to happen.

[demachina]

Here is an interesting, though left wing interview with Standard Schaefer on the ulterior motivies of the imminent plan by the Republicans to privatize social security and to use it to pump money in to Wall Street. It should be taken with a grain of salt but raises a lot of thought provoking questions about how the markets really work.

Assuming the Republican's retain control of power next year its a near certainty they are going to make a first attempt at privitizing Social Security. The case for this was very strong during the bubble, they just had to point to how much money people were making in the stock market versus the miniscule return on the money in social security.

This movement suffered a major setback when the bubble burst and large numbers of small investors had their retirements wiped out and ended up working at Walmart. Of course they could have stayed the course, assuming they hadn't put all their money in complete turkeys Wall Street told them were sure things, and would have come out OK but a lot of people saw their life savings disappearing at an alarming rate and managed to get out just in time for the bottom of the market.

So Wall Street and the Republicans are pretty keen on the current bull run to continue, and are doing everything they can to fuel it, as in extremely low interest rates to fuel margin buys and cutting taxes on dividends, so they can resume the plan to move Social Security money that is mostly going towards covering the deficit in to the stock market. The influx of this new money should further fuel a boom market that will rival the last bubble. Unfortunately there is a pretty good chance it will be followed by another huge correction, another one those in the know will correctly time, and get out on top, while the most basic retirement security of a lot of average people will be wiped out again.

From the article above:

"The financial sector is looking at these funds like a shark that sees nice juicy prey swimming in the water. They would love to get their hands on Social Security and Medicare funds to manage, at a 2% fee. Even just 1% this would amount to tens of billions of dollars annually, not including the speculative gains that could be made on the turbulent market run-up."