Last Thursday, when the Dow suddenly nose-dived into what, for a moment, seemed sure oblivion, I joked afterwards that the whole thing reminded me of good old-fashioned espionage and intrigue. You know what I mean. You know those moments in film and TV history when, as security guards -- or even the bad guys -- are watching surveillance cameras, there is that little blip on the screens that is dismissed as nothing? The irony, of course, is deliciously fun, as we know, as viewers of such fine theatrics, that the blip indicates that moment when some hacker has seized control of the software; a new feed is being looped through, and the images on the screens are not only fake, but no one detects the system as a whole is no longer under the control of those who once controlled it.
Last Thursday's momentary blip looked a bit like that very moment when a hacker's rogue program seized control of a set of servers, only to restore things to the look of normalcy in a matter of minutes.
It seems amazing that such a sophisticated trading system like the Dow could have been so vulnerable to a data entry error. Initial reports, as you recall, were that the cause of the sudden and drastic downturn was because some trader mistyped something, perhaps entering a billion when only a million was intended.
But now it seems the cause of last Thursday's crash that was not a crash -- now called the "Flash Crash" -- is still unknown. Check out "Did a Big Bet Help Trigger 'Black Swan' Stock Swoon?" in Monday's Wall Street Journal.
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