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'Flash Crash' anniversary leaves unanswered questions

Traders work on the floor of the New York Stock Exchange after the opening bell May 7, 2010 in New York City. Stocks began the session mixed after a wild ride Thursday with the Dow plunging almost 1000 points before closing down 347.

Heidi Moore: Well tomorrow is the one year anniversary of a Wall Street disaster -- that we still don't know the cause of. I'm talking about the so-called flash crash when the Dow dropped 600 points in five minutes. It recovered a few minutes later, but many investors lost a lot of money in the drop.

Here's our New York bureau chief Heidi Moore.


Heidi Moore: After markets went into cardiac arrest during the flash crash last year, regulators took six months and 104 pages to diagnose the problem: a few computer trades that went haywire.

But there are still lots of questions, says Larry Tabb. His firm, Tabb Group, analyzes the stock markets.

Larry Tabb: Are we comfortable that that cannot happen in the future and is everything right with the markets going forward? And I think the answer is an equivocal: "Who knows?"

Regulators have put in place several rules to keep stocks from crashing to zero when something goes wrong. But some skeptics would say that's like using Band-Aids to fix a heart attack.

Here's Jamie Selway. He examines the markets for ITG.

Jamie Selway: There is more unknown out there than they're used to. If you ask, do people feel confident, I don't think you get many yeses.

Experts say the regulators' Band-Aids have worked so far, but the market is really due for a full physical check-up.

In New York, I'm Heidi Moore for Marketplace.

About the author

Heidi N. Moore is The Guardian's U.S. finance and economics editor. She was formerly the New York bureau chief and Wall Street correspondent for Marketplace.
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