Marketplace®

Daily business news and economic stories

‘Flash Crash’ anniversary leaves unanswered questions

Regulators have put in place rules to keep stocks from tumbling to zero, but skeptics question their adequacy.

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.

Related Topics

Collections:

Tagged as:

Latest Episodes

View All Shows
  • Marketplace Morning Report
    3 hours ago
    7:04
  • This Is Uncomfortable
    8 hours ago
    4:41
  • Marketplace Tech
    8 hours ago
    7:47
  • Make Me Smart
    3 days ago
    25:16
  • Marketplace
    3 days ago
    25:41
  • Million Bazillion
    a month ago
    32:45