Posted By Colin Doyle May 6, 2010
"a B instead of an M" That's a real quote from CNBC's Matt Nesto on the Closing Bell today. Speculation right after the close was that a trader from Citi (C) hit a sell order followed by a B (as in billion) by accident. This is being offered as the potential reason for the massive plunge (as low as 1000 points) in the market around 2:30 this afternoon. In order to prepare yourself for the rest of the bullshit that will no doubt color the ongoing discussion of today's events, I have listed several other meaningless terms that will be tossed around:
The bottom line is (despite what actually happened) this type of instability will scare retail money out of the market FOR GOOD. Even if there was a way to ensure that retail trades wouldn't execute through these other exchanges, why would "teddy e-trade" give a #$%^ about that, when he's in a state of shock from watching the indexes bounce up and down like volume bars on a radio. Who's to say what's legitimate or not without uniform standards across exchanges. It's a nightmare for anybody who isn't gaming it.
NYSE CEO Dumbcan Niederauer on The Closing Bell today:
This idiot couldn't be more off base with the practice of temporary trade halting. PG trading down to a penny a share in a few minutes has nothing to do with market efficiency and everything to do with DEFICIENCY. Why bother slowing everything down @ the NYSE if the outcome is simply going to be hedge funds on anonymous exchanges exploiting this practice to force fraudulent price swings. The NYSE needs to review this policy. While today represented an egregious example, I wonder just how often during the panic market of 07-08 we saw this type of trading halt @ the NYSE create inaccurate pricing through order rerouting. The bottom line is that the actual architecture of trade routing is clearly flawed in its present form and it's issues are only exacerbated by this maddening "slowdown or halt" policy @ the NYSE.
Take a look at the behavior of these stocks this afternoon for a good laugh (or cry).
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