A Trader Hit B For Billion Instead of M For Million and 7% Of the Entire Stock Market Was Lost Immediately

(1) orders are given to traders all the time via bloomberg and IMs (not that often via email like i wrote earlier). the trader doesn't enter his order like that but very often gets it from a client or a salesperson in that format.

(2) order size is a number (it doesn't have to be just 0s). the fact that cnbc repeatedly posited a "fat thumb error" as the cause of the sell-off is a joke in and of itself.

(3) each bank has its own internal procedures for large orders but every bank has a series of sign-offs (human) that need to happen before a billion plus dollar order gets placed in the market.

it wasn't just screwed up trading algos -- the exchanges themselves had computer systems that failed.

tim bitener wrote:

(1) orders are given to traders all the time via bloomberg and IMs (not that often via email like i wrote earlier). the trader doesn't enter his order like that but very often gets it from a client or a salesperson in that format.

(2) order size is a number (it doesn't have to be just 0s). the fact that cnbc repeatedly posited a "fat thumb error" as the cause of the sell-off is a joke in and of itself.

(3) each bank has its own internal procedures for large orders but every bank has a series of sign-offs (human) that need to happen before a billion plus dollar order gets placed in the market.

it wasn't just screwed up trading algos -- the exchanges themselves had computer systems that failed.

These are retail procedures - institutional trading is different

1. Salestraders route orders to dealers via OMS. No hand written order tickets. Bloombergs are entered into OMS by ST, not dealer/trader. This is a compliance requirement. STs forwarding BBs get fired. A

2. Retail deals in odd lots. Instituional does not - they are aggregated and netted off. Most OMS ONLY handle board lots. You can't enter an odd lot. This is for purposes of speed - so you dont have to enter "00" repeatedly.

3. human sign off again is a retail procedure. If you key in and route a $1bn order, order validation will stop it and you have to call credit. Its all elecrtonically monitored. Credit sees the order, raises your limit, and you can release the order.

Bloomberg was down for 20 minutes too....the exoflood is beginning!

"Interference" is the correct word, not "Regulation". Deregulation is lack of interference.

More importantly, our annual interest on our debt is going to hit $900 billion before Obama leaves office. The actual debt of $20 trillion has to be paid off at some point. The debt exceeds GNP. Increasing taxes won't work, people are hurting too badly right now. The only way to fix this is to massively cut government spending and/or privatize some parts of government.

When the Dow hits 11,000 again next week, I don't suppose you'll be praising the President for it. Nah. The last 4000 points up had nothing to do with his leadership, why should the next 500? It's just the 350 points down today that were his doing.

I still find it hilarious that people blindly give money to someone else in the hopes that they will not only get their original amount back but that they will also get extra too.

No wonder there are so many scams and frauds happening!!!

I understand the market much better than you do, trust me on this one.

cnbc wrote:

I'm a free market guy but things are wound way to tight and there is way too much leverage if this can really happen:

http://www.cnbc.com/id/36998463

Also shows the banks have almost no internal controls.

Wow. Tremendous insight and great ability to repost a story from the least respected financial network available, OP. I'm assuming you're a banker and can expound on the internal controls of a bank?? Oh wait, you're not. Since you are such a free market guy, you probably never even thought about the controls on the side of the exchanges. What about their internal controls and regulations by the government, any failure there???

Too true.

So...Bush's legacy of 2 ground wars, a monster deficit, free reign to Wall Street, less income due to tax cuts didn't set things up to fail???

Failure of both parties to agree to some actual protection in order to save hedge funds and derivatives didn't matter at all?

Just Obama and Democrats to blame...???

Senior Software Engineer wrote:

Sure, someone with fat fingers accidentally tanked the market a 1000 points by pressing the wrong button. What a total BS story to appease the sleeping masses!

The SEC investigation has found that the trader at Citibank actually pressed a "g" for gazillion when he just meant to press a "z" for zillion.

I think it is funny that some people assign credit and blame for the market's performance to presidential administrations. A sitting president has so little power to affect the market that it would spin your head. Any 26 year old trader in New York has far more power over the market than the White House.

Anyone blame FDR for this 12 1/2 month disaster? Didn't think so.

2nd Worst Stock Market Crash: 1937-1938

Key events: Legacy of Great Depression, war scare and Wall street scandals

Date Started: 3/10/1937

Date Ended: 3/31/1938

Total Days: 386

Starting DJIA: 194.40

Ending DJIA: 98.95

Total Loss: -49.1%

Under Bush, public debt rose to 70 percent of GDP from 58 percent, and a fair amount of that time was expansionary (bubble), a time during which the gov't should have been balancing its budget for a rainy day (two years), not cutting taxes on the rich and ramping up spending. The consequences of the recession were that tax revenue declined and to have then cut spending by the federal government would have deepened and lengthened the recession, further cutting tax revenues. In the short term, debt was added for a very good purpose and for the long term, government spending will be cut when it is no longer needed to prop up the economy, probably starting in two years. Note that 290,000 jobs (230,000 private sector) were created in the most recent month, the highest number since March 2006. Note, then, that the economy didn't even create that many jobs (maybe barely enough to keep pace with employment population growth) for nearly the last 3 years of the Bush administration. Compare that with Clinton. As soon as this hiccup with Greece is over (the loan guarantees are there, the legislation is passed, and the Greek output is 1/40 th of the Euro economy, very minor in relative size), we'll see better than 300,000 monthly job growth in the U.S. for much of the next four years.

U.S. private debt is far larger than U.S. public debt, but all told it is quite manageable in comparison to other countries.

http://www.comstockfunds.com/default.aspx?act=newsletter.aspx&category=SpecialReport&newsletterid=1504&AspxAutoDetectCookieSupport=1

^^^^^^^^^^^^^^ ..........And so because of this Obama can run up the deficit even more and gloat about it on TV, under the same guise as when Bush did it.

"if you progress past the first 2 weeks of intro econ you learn that there are all kind of market imperfections that need government intervention."

Wrong. But would you care to give actual example for your incorrect declaration?

"after 8 years of stepping away from virtually every marketplace we are now dealing with the results of the most free markets in the modern era."

Wrong again, and again, would you care to back up your incorrect statement with proof?

"hopefully the obama administration will unwind the banks that were labelled too big to fail under the antitrust laws that have been under utilized since teddy. and in doing so we should unrepeal the Glass-Steagall Act because taxpayers shouldn't insure investment banks. if people want to take big risks that is fine, they just shouldn't do it with our money."

You kind of sorta got the right ideas going here, but you're mixing-up your talking points from AirAmerica and libertarian philosophies that you've probably heard someone mistakenly pass off as liberal. You'd probably be better off trying to learn about what you're trying to regurgitate instead of sounding like a twisted liberal.

Your first sentence makes no sense. Your second sentence is a non sequitur. (You can look that up sometime, it will enlighten you, for sure) repealing Glass-Steagall prevented, even according to the first black president (not Obama), the financial crisis from being even worse then what it was. And it has nothing to do with Wall Street and DC making taxpayers insure their risk.

"the biggest hindrance to free markets is not the government"

Yes it is.

"it is companies who have excessive market power"

And how do you think they get that excessive market power? From magical unicorns? No, dimwit, from Washington.

"they lead to much greater inefficiencies in the market than any tax or regulation that the government has put in place."

"great inefficiencies". Aw, look at that, someone's trying to use big, economic sounding words to sound smart. Haha. LOL. Once again, care to back that up with "facts". I mean, you could be right. Taxes and regulations are SO good for encouraging job growth and economic development. Wow. Thank you public ejukashon!

"in the end i am glad we ended up with the guy willing to do whatever it takes to help our economy and not the guy who thought the fundamentals of the economy were strong days before the market dropped more than 20% in response to the crumbling fundamentals"

You mean the guy who supported the bailouts and the tarp and all the useless, needless and unhelpful intervention that the dems and barry himself pushed for and rammed down our throats, just like unhealth uncare and financial deform? You mean McLaim? A dumbocrat in, well he doesn't even wear republican clothing.

"Duh, da democrats r good. Duh, da republican r bad. Duh, I don't tink for maself cuz it hurtz ma head."

Go practice memorizing your talking points a little better. I'm sure eventually you'll sound smart to someone other than public school dimwits.

Silent SUper Majority wrote:

just saying wrote:

i love how you can just drop in "Obama and his failures" without any explanation as if you think it is a given. evidence much?

Anyone with a few brain cells knows exactly what he is talking about and does not need it laid out in print and spoon fed like an infant. Im sure he is sick of trying to explain basic economics and politics to backwards liberals who would not accept the truth if their life depended on it, like you.

So Obama wrecked our economy by not stopping George W. Bush from doubling our national Debt and causing(with a little help from Clinton) the the Housing bubble and crash?

latently homosexual teenager wrote:

^^^^^^^^^^^^^^ ..........And so because of this Obama can run up the deficit even more and gloat about it on TV, under the same guise as when Bush did it.

It is very simple. Countercyclical spending. You deficit spend during a recession to get the economy out of the recession (which worked, yet again) and you then run surpluses during an economic expansion in part so that you are prepared to handle the next recession without a debt crisis. Bush made that difficult for Obama by eliminating Clinton's surplus and running high deficits even while there was an expansionary period of half a decade (granted, one that was historically lousy on the jobs/pay front and paid for largely by a chimerical housing boom and corporate profits without wage gains). Of course, the shape of the spending is important. You get no long term benefits and very few short term (1.03/1 or worse) in stimulus on tax cuts vs. 1.59/1 on public works or even more for food stamps.

In small words: run surpluses when times are good and deficits when times are bad.

Wrong. Examples please!

Wrong. Wrong. Wrong. We need proof! Proof I tell you!

You are sounding like a twisted conservative. You are confusing the original poster of being liberal and libertarian at the same time. You twisted crazy conservative. It's like you are mixing up your Fox News crap with the other guy. You are crazy!

The first sentence in this paragraph is kind of mean. The second sentence is a red herring (look it up!) Your next block of drivel is a fallacy of deductive induction (look that one up too!). And the financial crisis as nothing to do with aliens from outer space or swamp zombies either.

No it is not.

WRONG! It is from unicorns! Magic ones. Hold up... were you just arguing that Washington gives banks too much power? I am really confused. Or are you the one who is confused. You think that regulation of corporate banks gives them too much power? Explain that one.

Wrong again! You are so stupid. I can't believe you don't see it! STUPID! Wrong. Thanks again for showing us how stupid you are.

Dumbocrat? I need facts! Unhealth care? You are so far off. Facts? RePUBElican! haha. Every child left behind! Poop. Fart. Haha.

Ah yes, small words. I can agree with you on the cc spending theory. Problem is surpluses don't last. As a politician your job is to spend money. Not alot of states, counties, or cities have subscribed to the cc spending theory. Now it's higher taxes when things are good, and even higher taxes when things are bad.

We haven't converted over to socialism yet, give it time.

Socialism = trickle-up poverty. We'll get there. The bodies haven't floated to the surface yet, but this sovereign debt crisis is brewing large. Yesterday was merely a shot across the bough. May take awhile to reach the US, but we're living on borrowed time and money (as is much of the developed world). That the Fed has engineered a once-in-a-generation liquidity binge, which has encouraged the flight-to-risk trade, will have to unravel -- eventually.

I can't understand why people continually promote Europe as a paragon for the US. The EMU is at very high risk of fracturing, and the EU is now having to face the harsh consequences of socialist policies, which are, by definition, unsustainable in a globalizing, competitive marketplace.