At around 2:40 p.m. on Thursday, May 6, (2010), I pulled up Yahoo Finance to see how the market was reacting to the demonstrations in Greece earlier that day. To my surprise, with every website update, the market dropped another 200 points. At one point, the DJIA was down almost 1,000 points. My stomach churned. I can recall only two other times when the market experienced such a radical drop: on 09/11/01 and after the collapse of Lehman Brothers. What was going on?
Why the 1,000 point drop?
I scanned the headlines. As expected, Greece agreed to accept aid from the rest of Europe and some demonstrations got a little out of control. The news hadn’t changed from the morning updates. Before the day was over, the irregular trading activity was widely reported as a trading error. More than a week later, investigators still do not know what exactly ...