I said this from the start. The “fat finger” nonsense had nothing to do with the plunge. The e-mini S&P’s came under assault with massive sell orders as Greece got out of hand, the yen carry-trade unwound violently, the Euro was plunging, and Trichet had nothing new to say. That in turn triggered massive basket selling. And then the computers got out of the way, leaving no bid in the market.
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.