“The Flash Crash” Imagine a beef processor that was linked to an e.coli-tainted shipment that ultimately killed 100 people. A week after the outbreak, the authorities were still trying to determine how e.coli got into the beef processor’s facility. In the meantime, the facility was operating “normally,” and continuing to process and sell beef to...Read More
Lots of Dry (Financial) Tinder Want to know who — or what — caused Wall Street’s melt-down last Thursday? It was Mrs. O’Leary’s cow. Or at least the 21st century, financial equivalent. Huh? It was Mrs. O’Leary’s cow, of course, that got the blame for causing the Great Chicago Fire of 1871 (it turns out...Read More
“Lurching From Port to Starboard” My favorite quotes assessing yesterday’s market action follow. (Note: ‘HFT’ stands for “High Frequency Trading”; “fat finger” refers to the rumor circulating that someone at Citigroup mistakenly entered a trade with “billion” instead of “million” entered.) Personally, I find it hard to believe that a clerical error could be the...Read More
Wall St Still Pushing Back on Reform Transactions costs have declined significantly over the past 10 years, thanks to the many structural changes in equity markets, including trading in decimals instead of eighths, the proliferation of scores of trading venues that function as exchanges, and an explosion of high-frequency trading. Vanguard has estimated that total...Read More
