The Sale That Dropped 600 Points
We knew capitalism was crazy, but it turns out it took only a single sale of $4.1 billion in futures to put into motion a series of events that culminated in the “flash crash” of May 6, during which the Dow Jones dropped 600 points in just a matter of minutes.
The sale, which was discovered after a months-long investigation and long-awaited report from the SEC, concludes that the crash was not a result of market manipulation but rather the regular trading of futures made possible through aggressive deregulation. –JCL
Wait, before you go…The New York Times:
A single sale of $4.1 billion in futures contracts by a mutual fund touched off a series of events that led to the so-called flash crash, the sharp stock market decline that shook investors and markets on May 6, federal regulators said on Friday.
In a long-awaited report, the Securities and Exchange Commission and the Commodity Futures Trading Commission said they had identified the sequence of events that erased more than 600 points from the Dow Jones industrial average in minutes on the afternoon of May 6 before the markets recovered just as quickly.
Significantly, the report found that the plunge was not caused by any market manipulation but by a single firm trying to hedge its investment position, if in an aggressive and abrupt manner.
If you're reading this, you probably already know that non-profit, independent journalism is under threat worldwide. Independent news sites are overshadowed by larger heavily funded mainstream media that inundate us with hype and noise that barely scratch the surface. We believe that our readers deserve to know the full story. Truthdig writers bravely dig beneath the headlines to give you thought-provoking, investigative reporting and analysis that tells you what’s really happening and who’s rolling up their sleeves to do something about it.
Like you, we believe a well-informed public that doesn’t have blind faith in the status quo can help change the world. Your contribution of as little as $5 monthly or $35 annually will make you a groundbreaking member and lays the foundation of our work.
Support Truthdig
Business & Economy
Advocates want to enforce statutes banning ownership of medical practices by corporations not owned by physicians.
There are currently no responses to this article.
Be the first to respond.