On Thursday, May 6, at 2:45 in the afternoon, the billionaire industrialist Wilbur Ross was interviewing a job candidate in his 27th-floor office when his computer screen went all red. The Dow, which had opened the day above 10,800, began falling. It dropped, paused and then plunged monumentally, down past 10,400 and 10,000 and then 9,900, in a Newtonian whoosh. Mr. Ross, 72, asked his interviewee to step out. “Then we bought some Greek bonds, and we tried to buy some other things,” he said later, wearing a silk tie patterned with hot-air balloons. “After we put the orders in, I brought the young man back. Once you bought, you bought.”
The biggest intraday drop in the history of the Dow, nearly 1,000 points, didn’t happen because of a calamity: No monuments had been burned and not a single colossal European country had defaulted. It just came. And then it went. The Dow was up above 10,500 by the end of the afternoon, and then back to 10,800 on Monday, after a trillion-dollar bailout package for Greece was announced. “We’re on to the next freaky thing,” a banking executive said this week, less than seven days after the Great Fall.
The New York Stock Exchange blamed Nasdaq. Nasdaq blamed the New York Stock Exchange. Then Nasdaq blamed the Chicago Mercantile Exchange.
Is a terrifying and bizarrely opaque 1,000-point free fall another thing that is just going to happen on Wall Street every now and then? If so, will we know why? More pointedly, have we learned anything from the terrifying and bizarrely opaque events of the past year and a half? “We hope to be able to provide investors and the public with more information soon on the events that may have contributed to this volatility,” the S.E.C. chairman, Mary Schapiro, told a Congressional subcommittee Tuesday, “but we should recognize that it will take time to fully analyze the data.”
The night before, in a corner of the joint book party he threw for the scholars Ian Bremmer and Nouriel Roubini, the hedge fund manager Kenneth Griffin did not want to bother parsing the stock market’s Thursday collapse. “Why did it fall on Wednesday? Why did it fall on Friday?” said Mr. Griffin, who is 68 slots ahead of Mr. Ross on this year’s Forbes billionaires list. “People make up stories after the fact.”
JAMES GORMAN, MORGAN Stanley’s new chief executive, was alone in his 40th-floor office after a Thursday lunch when he saw the market wobbling. He called Suzanne Charnas, his head of investor relations. “Oh, God, what’s happening?” they said. Mr. Gorman thought it must have been some kind of mistake.
Vikram Pandit was in a meeting at Citi headquarters. Another executive interrupted with the news. The chief executive stayed to finish the meeting, and then he collected staff in his office to talk. Steve Schwarzman was at Blackstone’s annual conference with limited partners at the Waldorf Astoria. A senior executive at AIG had all-day meetings. “I was in a cocoon all day,” the executive said. “Sometimes it’s good to be in cocoon.”
At 2:30, just before the crash, a former principal at Long Term Capital Management was walking out of a lunch with a hedge fund manager when he saw that the Dow was down a couple of hundred of points. “Not your best,” he said. He went to another meeting, which lasted until 3:15, after the fall and rise. On his iPhone, he checked a couple of his stocks. One that normally trades for around $3.50 was down 20 cents. “And I took a look at the low, and the low was down 75 cents. And I said, ‘No, that’s a misprint. Then I looked at other stocks.’” He realized what had happened while standing in the street.