The guys at Planet Money interviewed a college professor who goes into detail about how automated market orders led to a self-feeding frenzy. Part of the problem is that when the New York Stock Exchange paused to see what was happening, trades moved to other exchanges where bids were lower.
After meeting with the exchange executives today, Securities and Exchange Commission Chairwoman Mary L. Schapiro is scheduled to testify at a House subcommittee hearing tomorrow about what the industry will do to stop this happening in the future.
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