Wednesday, February 28, 2007

Putting the Dinah in dinosaur.

I'm sitting here watching a fresh faced lad on Fox and Friends discussing yesterday's market correction.

It's funny I look at this kid and have to laugh. He looks like he just got out of sixth grade and he is analyzing the market like he actually knew what was going on or something...he also looks a little scared.

Back in October 87, I was part of that wall street crowd that was sitting at their trading desks, staring at their screens and watching the market in freefall. It lost 23% of it's value that day so yesterday doesn't look so bad.

It was deja vu all over again as I watched yesterday afternoon's freefall and when I saw the time the nosedive started I knew that program trading was involved and once the programs kicked in, I also knew it was time to cross your fingers, say a prayer and stand back and hope that the systems would hold.

They didn't.

There was a glitch. Or two. The volume of trades processed was staggering. I read somewhere that 4 BILLION SHARES traded hands. The floor traders ended up having to use paper tickets to get trades done. This means that mountains of buy and sell orders backed up. Then the Dow Jones computers went on the lowdown and backup systems were deployed. Instant chaos resulted with a 200 pt drop in minutes, at one point plunging to over 540 points. One trader was quoted as saying "I was running around with old buy and sell orders like it was 1988!" This also means a lot of things came back as "Nothing Done."

It must have been wild!

1988. Hah. Dinah was there. And it was a freaking zoo back then.

About those "nothing done" trades? Trades were reportedly cleaned up in an extended trading session with NYSE execs 'claiming a related and isolated' system problem.

Today will be interesting to watch.

The losses were real and the market value got scalped to the tune of over $600 bil. (What goes up must come down, people.)

But I'm thinking it will be a positive open.