The May 6 market plunge: a web of rules with serious gaps
Saturday, May 22, 2010 at 12:04AM
Thomas P.M. Barnett in Citation Post, finance, new rules

SEC chief Mary Schapiro spoke at a congressional hearing on the 11th concerning the 6 May 1,000-point drop in the Dow Jones Industrial Average that spooked America's other big markets.  Regulators, we are told, can't locate a single cause to explain it away, "but the lack of unified rules among stock exchanges played a role," Schapiro said (paraphrase).  

Classic problem, replicated today on a global basis.  Everybody is running on the assumption of harmonious rule sets, and plenty of players seem to be arbitraging that non-reality--some more dangerously than others.

The connectivity has outraced the rules--the essence of globalization today.

Article originally appeared on Thomas P.M. Barnett (https://thomaspmbarnett.com/).
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