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Kai Ryssdal: Last week's momentary 1,000-point plunge in the Dow is the cause of a lot of head-scratching amongst market regulators. The leaders of a number of major stock exchanges met with the SEC today. There was broad agreement that there should be a uniform system of what are called circuit breakers, ways to slow trading, or stop it entirely in case of a sudden crash like we had last week.
Because as Marketplace's Jeremy Hobson reports, the way things are now doesn't seem to be inspiring a whole lot of confidence.
JEREMY HOBSON: As the market collapsed last Thursday, TV cameras were focused on the floor of the New York Stock Exchange. But they probably should have been focused on a number of computers.
CHARLES JONES: The New York Stock Exchange is really only a small part of trading overall in the U.S. There are dozens of other places that people trade.
Charles Jones is a finance professor at Columbia University. He's got no problem with multiple exchanges or electronic trading. Good for competition, he says. But he says the fact that no one's yet been able to pinpoint the cause of last week's crash indicates the mystery of today's marketplace.
JONES: It should not take three business days to figure out exactly what went wrong.
Doesn't really inspire confidence in the stock market, does it? If anyone can figure out what went wrong, it might be Jatin Suryawanshi who heads up the algorithmic trading division at Jefferies.
He describes today's landscape of stock exchanges as a series of computers that can talk to each other, but sometimes can't comprehend what the other is saying. Amid last Thursday's mayhem, he says the New York Stock Exchange went into a slow-trading mode.
JATIN SURYAWANSHI: They went from an automated to a manual mode of trading, and that resulted in a lot of the market makers not being able to understand what is happening to their orders on one of the exchanges, and they started withdrawing.
He says uniformity is the key to fixing today's system and restoring confidence in fragmented markets. He says each exchange should always know what the others are doing. That should include circuit breakers, he says. So if stocks stop trading in one place, they stop trading everywhere.
In New York, I'm Jeremy Hobson for Marketplace.