Skip to comments.Cause of bond 'flash crash' is a mystery, Feds say
Posted on 07/13/2015 3:24:42 PM PDT by BenLurkinEdited on 07/13/2015 7:21:15 PM PDT by Admin Moderator. [history]
Even the top federal agencies in the country couldn't find a clear-cut cause that triggered the whiplash in the U.S. Treasury bond market last October 15. The conclusion came from a report published Monday by five federal agencies, including the Federal Reserve and Securities and Exchange Commission.
(Excerpt) Read more at money.cnn.com ...
All the big investors, hedge funds and investment firms use computers to track everything. They probably all use the same algorithms and those algorithms said, “sell”.
I don’t think it’s much more mysterious than that.
Use the ‘fat finger’ excuse! The media bought it last time...
Someone on the other end pushed the wrong key?
Algorithms looking for statistical arbitrage (as opposed to true arbitrage) often move together, even if the methodologies used are different.
Since these securities quickly recovered, it’s evident that other traders were looking for arbitrage opportunities on the opposite side of the trade.
Another one of those darned fat fingers.
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