World stock markets were reeling over the Dow’s bungee jump yesterday. Blame it on the Greeks, or the “fat finger problem?” Glen Ridge economics-poet-blogger, David Lefkowits, whose daily financial commentary Limericks Economiques has captured the attention of the Wall Street Journal, summarizes the day’s disaster in a limerick.
Diagnosing the Dow’s Dizzy Drop
While coaxing the PIGS from the trough,
Some bankers developed a cough,
Which an I.T. snafu
Turned into swine flu,
And a feverish market sold off.
(Acronym alert: PIGS = Portugal, Italy/Ireland, GREECE and Spain)
Here are some other theories on yesterday’s economic drama. Entertain us with a limerick of your own on whatever topic you choose — the stock market, taxes, budget cuts, sprintime, or even mom.
The “fat finger” theory has pretty much been discounted by now. Program traders have position limit parameters within which they need to operate. A number of steps would need to be taken to enter a trade significantly in excess of a trader’s credit limit and the system would need to be overridden manually by a senior manager. Also there are a series of prompts such as ” are you sure you want to do this.” Really, a trader can’t just vaporize hundreds of billions in market value by spilling coffee on his/her keyboard. More likely a function of massive volume of sell orders overwhelmed electronic order matching systems at a number of exchanges away from NYSE where more flow has increasingly been directed. Seems like some old fashioned human intervention could have helped.
A pseudo haiku:
Far too much money,
chasing excessive returns.
Convulsive movements.
That damn Bush!