Excitable technophobes and high-finance conspiracy theorists will be disappointed to find out that the May 6 “flash crash” was not caused by a shadowy collective of trader-terrorists bent on financial armageddon.
Instead, Gregg E. Berman, who’s heading up the Securities and Exchange Commission’s investigation into the crash, tells The New York Times that his report will focus on a specific series of events that preceded the crash (as one would hope). The report will also avoid the temptation to merely point out the dangers of high-speed trading, Berman said. Beyond that, details were scant. And so, The Times turned to an expert:
“What everybody would love to hear from the S.E.C. is XYZ trader blew up the market and made a gazillion dollars and is now in jail,” said Larry Tabb, chief executive of the Tabb Group, a specialist on the markets. “The answer, I think, is much more complicated and nuanced and has to do with a lot of different things. I am not sure that everybody outside the industry is going to have the patience to understand that.”
Even though we’re looking forward to the Berman report, Tabb is right in one sense. It’d be extremely cool to find out that some maniacal hedge fund created a computer program that could blow up the stock market and bring the financial system to its knees, all while making billions of dollars. We’d definitely watch that movie.
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