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House Calls For Hearing On Stock Market "Glitch"
Lucas123 writes "The House Financial Services securities subcommittee plans to hold a hearing next Tuesday to examine what caused the US stock market to plunge almost 1,000 points in a half hour Thursday, and it called on the SEC to investigate possible problems with computer algorithms that may have exacerbated a human order-entry error and led to the precipitous drop. 'Reports have surfaced that much of this movement was potentially as a result of a computer glitch,' Committee Chairman Kanjorski said. 'We cannot allow a technological error to spook the markets and cause panic. This is unacceptable. In this day and age and with the use of such complex technology, we should be able to make sure that our financial markets are effectively monitored and investors are protected.'"
*sorry for posting twice I forgot to login*
They are lying threw their teeth if they say nothing unusual happened. I watched it on fold on my trading platform and it was like 1/2 the market just turned off while computerized trades relentlessly sold to the nonexistent buy side. In the end its likely that the only people who got hurt by this were retail investors who trade with stop-loss or trailing stop-loss orders. I have plenty of stocks that didn't drop more then 60% but most moved over 25% effectively stealing shares from every small investor who had trades execute that they probably never intended. Then many of these stocks recovered to only a few points down as the market makers walked everything back up.
Through a glitch/mistake (likely) or through a master organized plan (unlikely) the big financial players were able to shift around billions of dollars of wealth inside of 30 minutes.
The market needs a kill button that can go off automatically during drastic movement. The market should stay off for 30 to 60 minutes to ensure its functioning correctly. Then it can turn back on and repeat the cycle. If the market really needed to fall 1000 points it would still do it in a day but it would semi-controlled and because investors really believe it should go there.
Thursdays 1000 point drop was computer generated and it was absolute bullshit that cost retail investors dearly.
And for the record it didn't cost me much and I normally don't care about the average retail investor but even I have a soul and Thursday was 100% wrong and needs to be fixed.