Around 2:50pm yesterday afternoon (5/6/10) the heart of Wall Street skipped a couple of beats as the DOW suddenly dropped nearly 1000 points! This incredible event which is being referred to as a “Flash Crash” had most if not all investors scrambling, well except for Jim Cramer who kept his cool (as cool as Cramer can be, lol).

So what could have caused this event? Initial reports have stated that the drop was possible caused by an error from a trader from a major firm (CITI). They believe there was supposed to be a $16 million trade on an S&P 500 futures-linked contract. The trade was entered in billions instead. So for about 10 minutes it was believed that the stock market was crashing, and we were potentially looking at “Black Thursday”; and this was all caused by some dumbass trader who fat-fingered a deal?!?!?

Amazing!!!

There is also speculation that along with the fat-finger moment that the unstable situation with Greece also contributed to 995 point dip in the DOW.

As a result of this dip the market witnessed the craziest event as 6 companies; Exelon, Accenture, CenterPoint Energy, Samuel Adams, TransMontaigne Partners, and Impax Labortories stocks fell to zero dollars!! So for a short time a regular Joe like me could have bought enough shares in Samuel Adams to be a possible majority owner, LOL! Of course that did not happen as the event occurred so quickly. Although it was said that a few people (with great timing) probably made some money due to this mistake; but that financial gain might be short-lived for the lucky few as news trickled out after the close that deals during the “Flash Crash” will be voided.

With all that said, I will admit that I am that I am no Wall Street Guru and the idea of a trader fat-fingering a deal is kind of funny. At the same time I can’t help but wonder if this fat-finger story is a possible cover-up of a bigger story. Earlier this year the United States admitted that our Power Grid was hacked into by the Chinese and that the U.S. is vulnerable to cyber-attacks. Could it be that the “Flash Crash” was a result of a cyber-attack?

Some might say, “If it was a cyber-attack why only cause such little damage? Why not take down the whole system?” My answer to that is very simple; this was just a test of what the hackers could do. No reason right now to start a potential cyber-war; best believe the U.S. is also heavily involved in hacking other countries systems.

If you’re still doubting my theory remember on the 4th of July in 2009, several Federal web sites were hacked and caused minor insignificant problems (http://www.msnbc.msn.com/id/31789294/ns/technology_and_science-security). The U.S is very vulnerable to a cyber-attack and the current administration is aware of this.

This is only a theory of mine so don’t take it as fact that someone hacked Wall Street, this is just a little something for you to think about as we snicker at the fat-finger story.

P.S. Citigroup has not confirmed or denied that the erroneous trade was submitted by one of their traders.

As always….
If there is something to be said, “Its On Broadway” to step up and say it!!!