Did a B Kill Wall Street?

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

The stock market plummeted today, but it did so in an odd way: the Dow dropped about 6% in the space of five minutes and then gained about 5% a few minutes later. Initial news reports suggested the drop was centered on panic over Greece, but there was no special news about Greece that suddenly hit the wires at 2:30 pm and then, just as suddenly, disappeared a few minutes later. Perhaps, instead, it was just a garden variety screwup?

The WSJ reports that a trader may have accidentally placed an order to sell $16 billion in futures tied to stock indexes, when he meant to place the order for $16 million.

And there were “a number of erroneous trades” during the minutes when the market was plunging, a spokesman for the company that owns the New York Stock Exchange told Bloomberg.

The FT’s Alphaville blog points out that Procter & Gamble shares fell by more than 20 percent — about three times as much as the Dow — before regaining almost all of the ground it lost, and says the decline may have been related to a “technical screw up.” And Barron’s notes that shares in Accenture — which opened and closed the day above $41 per share — traded for one cent per share at one point today.

Planet Money’s chart of the Procter & Gamble drop is above (P&G = blue, overall market = red). So I wonder whose screwup this was? Rumors suggest it was some poor schlub at Citigroup. And what happened to all those automated systems we hear so much about that are supposed to prevent this kind of thing? After the Société Générale debacle didn’t everyone supposedly install safeguards that prevented individual traders from taking massive positions like this?

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest