Pennies From Heaven
They’re cleaning up another mess on Wall Street today, but this time it’s not Goldman Sachs’ fault. The center of the financial universe served up another heart-attack special yesterday, but the usual suspects were blameless.
That’s not to say that a Himalayan-sized mountain range of debt in Greece, Portugal and Spain is no longer casting a shadow over the global recovery. The Euro-contagion and its evil twin, the chronic (and still not cured) malady of synthetic collateralized debt obligations, still may kill the patient.
But, for one day at least, the world was treated to a comedy of errors that had even the most jaded economists slapping their foreheads in amazement. Think Fellini meets the Marx Brothers (Groucho, not Karl).
Here’s what apparently happened:
At approximately 2:42 p.m. on Thursday, a trader manning one of the futures exchange desktops issued a sell order on a contract worth $16 million. Instead of hitting the “M” tab on his keyboard, the poor fellow—who forevermore will be known as “The Fat-Fingered Trader”—hit the “B” button. That’s B as in Billion.
The overly computerized market reacted instantly. Within five minutes, the Dow Jones Industrial Average dropped nearly 1,000 points, wiping out more than 9 percent of equity, the equivalent of the combined GDPs of….well, Greece, Portugal and Spain.
Some individual stocks went into jaw-dropping minute-by-minute gyrations: Boston Beer Co., parent of Sam Adams beer, lost 100 percent of its value. Also plunging all the way down to zero was Accenture PLC, formerly touted by Tiger Woods. Here’s our favorite: auction house Sotheby’s saw its shares inexplicably skyrocket to $100,000 a pop, the same price it reportedly was asking for an autographed Michael Jordan jersey on Thursday afternoon.
The late Brewer-Patriot Sam Adams could not be reached for comment. Presumably he was pleased that beer-lovers were suddenly granted a revolutionary discount on his namesake. We have it on good authority that Woods interrupted his tee shot at the Players PGA tournament and declared “It wasn’t me!” Jordan is said to have grumbled that his jersey “is worth a lot more than 100 Gs, man.”
Watching the turmoil on Wall Street during a live broadcast on MSNBC, TV trading guru and Vladimir Lenin doppleganger Jim Kramer started hyperventilating and screamed “Buy, Buy, Buy!” to anyone within shouting distance.
Red-faced stock exchange managers wisely called a halt to the action at 2:47 p.m. When trading resumed a few minutes later, the meltdown was over and all of the affected stocks suddenly sprang back to their early-morning values. Perhaps some unseen hand at NYSE borrowed Hillary Clinton’s famous “Reset” button.
By nightfall, the entire planet let out a big sigh of relief and moved on to figuring out the British election results, which were equally baffling. Today, the stock exchange—no doubt with a nudge from the SEC—indicated it may invalidate all trades undertaken during Thursday’s five-minute “nervous breakdown.”
This bizarre episode left us pondering an existential question: