Markets price assets on a moment-to-moment basis. The efficient market hypothesis is not an immutable law of nature. No one wants to admit the obvious, that for a few minutes no one was willing to buy. Those prices were real.
The implications are ominous. We had better throw the bums out in November and get off the fast track to the United States of Greece.
Well and truly said.
The prices may have been real, but under an unreal situation: The NYSE had placed circuit breakers halting the selling of those stocks, but other exchanges (with much thinner volume) did not also stop the selling. Lo and behold, those stocks suddenly had penny-stock-thin volumes at the bid, but a lot of eager sellers. Drop a few millions of shares to sell at market, and you clean out all the bids down to a penny. The story might well have been different if the NYSE was still trading those stocks.
Yes. There is no "picking up where we left off" before the so-called "glitch". This was price discovery occurring like it has done in every plunge in decades past. It just happens minutes, instead of over the course of hours. The gov't will trot out a Boogieman (high frequency trading) to appease the masses who somehow think the markets were fairly priced in this horrific, deteriorating economy.
Look, the further we kick the can down the road, the nastier the washout. We kicked the can all through 2009, so we got a wipeout nastier than 2008. If we keep kicking the can down the road, we'll eventually get one where the bid goes away and STAYS away.