A question for the journo types: why is every downward blip in the markets suddenly a “rogue algo” or a “mini flash crash”? Does nobody make fat-finger errors any more?
Zero Editing is the loudest and most obnoxious abuser of this trope – at ZH, every downward blip (even if it’s promptly resolved) is not just a “new flash crash”, it’s an excuse for a Network-grade rant about how the machines are taking over and eating the lunch of something or other and blah blah end the Fed blah blah Ron Paul blah blah hyperinflation blah.
But this meme seems to be spreading. Yesterday FT Alphaville pointed out a fairly chunky fat-finger in aluminium futures, and labeled it a “mini cross-market flash crash”. Business Insider’s done it. The New York Observer’s done it as well.
Can we please please please nip this in the bud right now? Sometimes a fat-finger is just a fat-finger. Not every gap lower is a rogue algo. Not every sudden downward spew is a “new flash crash”. Traders haven’t stopped leaning on the F12 key, and they still throw rugby balls around the dealing room.