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Stock Market Sell-Off Might Stem From Trader's Fat Finger
s122604 points out a CNBC story according to which "the catalyst for today's extraordinary price swing (at one point the Dow lost almost 9 percent in less than an hour) may have been because a trader entered a 'B' for billions instead of an 'M' for millions on a trade of Procter and Gamble: 'According to multiple sources, a trader entered a "b" for billion instead of an "m" for million in a trade possibly involving Procter & Gamble, a component in the Dow. (CNBC's Jim Cramer noted suspicious price movement in P&G stock on air during the height of the market selloff).' Unbelievable there are no safeguards to protect against this."
I suspect that I speak for everyone with their retirement money and/or savings invested in the markets when I say: HO-LY SHIT.
Frankly, I was more comfortable with the concept that the DOW could drop 1000 points in one afternoon due to some obscure overseas debt concerns than I am the idea that the DOW can drop 1000 points in one afternoon because of a fucking typo. I realize that markets and the economy in general are collective illusions to begin with and all that, but do we really need to be reminded quite so forcefully?
Might be time to invest my money in something a little more solid, like canned food and ammunition.
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
When you can make money hand over fist doing nothing, a very bad thing has happened: work has ceased to become a rewarded function. Instead, it's who you can screw over with dodgy investment strategies and exotic financial instruments that are not only worthless, but a liability. It's time that we end the casino markets and return to investing in things that are actually part of the economy that creates jobs - manufacturing, infrastructure, and technology.
Fund managers who literally do nothing but piss away money are making $1,000 an hour, and the people who educate our children are making less than $20 an hour. Something is seriously wrong with this picture.
It amazes me that the financial industry continually gets a free pass on matters that would result in public outrage towards any other industry that deals with people's livelihoods.
This explanation, whether true or not, is equivalent to saying that an airplane crashed because of a single faulty sensor.
Or a bridge fell due to one rusted bolt.
But, here, one fat finger led to the temporary destruction of nearly 1 trillion dollars of value! Would we tolerate such bogus explanations from aerospace engineers or architects? Why can we not demand the same from our financial "engineers"?
Fund managers who literally do nothing but piss away money are making $1,000 an hour, and the people who educate our children are making less than $20 an hour. Something is seriously wrong with this picture.
Yes. And further, consider how Wall Street has attracted the best and the brightest of all of our people, math PhD's, engineers, those with an excellent ability to see the broad patterns in society. Our most brilliant citizens are pulled into Wall Street as "quants" or traders or corporate lawyers, and are often paid six and seven figure remuneration per year. And to do what? To game the system in favor of their wealthy masters at the expense of the middle classes. Do they create wealth, or are they merely helping to transfer it from the hands of the many to the hands of the few who can afford their services. Wall Street quants were supposed to make recessions a thing of the past. We all know how that turned out.
Meanwhile fields like science, engineering and medicine lose the most brilliant individuals. Citizens who would formerly have become professors, providing independent analysis of society's problems instead become selfish multimillionaires, who then retire at 40 to a life unproductive leisure. Think of what these brilliant people could have done if their abilities were harnessed in the right fields and with the right motivation. Think of the problems that could have been solved. Think of the knowledge that could have been gained. Think of the lives that could be saved by new medical discoveries. Think of the new technologies that could have been developed for the common good. Wall Street's co-opting of so many of the geniuses in our society will have profound consequences for our civilization. I can only hope that we can undo much of the damage been done by this corruption.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
I mean really? What do these traders produce? Nothing. But they earn money, quite big money solely on speculation. What is the purpose of this at all?
Liquidity.
You obviously have no idea what a stock market is. The buyers want to buy, and the sellers want to sell. The trader makes it easier for them. Forget stocks, look at something possibly easier for you to understand: you want to buy a house. You have money. But no one is willing to sell you a house. So what happens? You don't get a house. Conversely, you need to sell your house, but no one wants to buy one. So you have to wait 10 years. Get it?
Traders are middlemen, but they facilitate transactions. When they are right, and correctly estimate the direction of the market, they make a profit (call it a commission). When they're wrong, they make a loss. Traders aren't costing anyone anything - the buyer WANTED to buy and the seller WANTED to sell. No one is being forced.
You say that traders make "quite big money" on speculation. Yes. They also LOSE a lot of money on speculation. Today I lost $9,000. Are you happy now that you have a day job? Even if you work at McDonald's, you earned more than me - today. I'm not bothered, because eventually I will make that money back. However there is RISK involved. If you don't take risk, well, what do you expect? Minimum wage. If you take risk, you can make money. However you can and WILL lose money often.
But please don't go thinking that traders are the cause of all problems - they're not. It's banks that borrow money at 0% from the government and lend it out to you at 15%+ that are the problem. Enslaving people through debt is not something capitalism should be proud of. However corporations need to sell shares to raise the billions they need to make the products/services that benefit you and I. The only place they will get that money is from traders.
Seven puppies were harmed during the making of this post.
the Big Problem the audit would "uncover" has nothing to do with the dollar's worthlessness, but in majority of people finding out our Federal Reserve is just local branch of international banking cartel, manipulating th economy of and draining jobs and wealth from the U.S. for those in a position to take advantage of economic cycles.
What do you think "auditing the Fed" really means? The Fed's books are already open and reviewed by accountants regularly. In this context, "auditing the Fed" means putting the Fed under more control of politicians, which does NOT WORK... just ask Japan. Yes, the politicians would LOVE to get their hands on the money spouts.
I find that when people go off about the Fed, monetazation, etc they generally don't know jack about economics and ultimately start babbling about end of world scenarios, the government, blah, blah blah rather than economic facts.
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