Maybe the whale was warning us of the impending stock market bungee jump. It's possible. The word on the street is that someone typed billion, but meant million, in a sell order. The risks of txt'ing your sell order can't be overstated. What better image than the fail whale for such a warning. Alas, we were all too mesmerized to listen.
And mesmerized is a good word for it. Turns out that a big sell order like that, erroneous or not, triggers android traders to sell without thinking (not that they could). Then the meat-based traders get in the action and boom goes the market. Mesmerizing indeed. We've created an unpredictable monster and someone kicked it accidentally. So fragile we are.
The stock market is the biggest hive experiment we have. I'm personally fascinated by the stories we project on the movements of our pet monster. Oh he yawned! It must mean that the crisis in Bolivia is not that important. Uh oh, he burped. It must mean that interest rates will rise. From the inside of the cage, it must be the same with just a bit more nuance. I want to know who really understood derivatives. Was it like feeding our monster some re-processed waste? I think we did that with the cows and it didn't turn out so well.
Will Friday be boring? It's hard to beat the last two days.
A song for this post.
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Great post. Gets at the heart of the vapor, the funny-money, the arbitrariness. Allusion to mad cow is apt and frightening.
ReplyDeleteNice post. I am fascinated how the economists always have a nice tidy explanation of why things happened the way they did, post-event. However they are nearly useless at predicting future events. I get the distinct impression that economists are in the business of providing plausible explanations, without the annoying requirement that the explanations be actually accurate. Explanations that are plausible but wrong can, I think, cause a lot of damage, especially if they are used in the future to guide decisions.
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