I frequent the Calculated Risk blog. The comments over there have me convinced the cover story is just that. This was a real event caused by actual distress and amplified by computer trading.
I left my desk with DOW -350 (yahoo quote, probably delayed) to go to lunch. I paid for lunch, picked up my salad bar tray and saw CNN showed -650 or so. By the time I got through the salad bar I saw -995. Then I went to get the main dish and find a table. By the time I sat down it was -550 and climbing. This was all in the timespan of less than 5 minutes I think. No way this isn’t related to automatic computer trades but I can’t fathom automatic buy orders being set so low. The graph shows an abyss that looks to have an infinite bottom. A classic V shape straight down and up with no significant variation. I just can’t seen where all the buy orders came from so quickly.
