Monday, May 9, 2011

Since crash, nothing flashy

A year ago Friday, Wall Street endured one of the most turbulent trading days in history, with the Dow Jones industrial average plummeting nearly 1,000 points, close to a tenth of its value, in about 20 minutes. The Dow regained all but a third of the loss before the market closed, but the so-called flash crash spooked investors, who were already beset with worries that debt troubles in Europe would undermine the slow economic recovery in the United States. A measure of the inadequacy of regulatory technology is how long it took for the SEC and the Commodity Futures Trading Commission to issue their final report on the May 6 trading debacle, according to David Leinweber, head of the Lawrence Berkeley National Laboratory Computational Research Division's Center for Innovative Financial Technology. "Taking nearly five months to analyze the wildest-ever five minutes of market data is unacceptable," Leinweber wrote in an editorial this spring for the Journal of Portfolio Management, a trade journal of institutional money managers. More>