That happened to me once!

Once...

craigie beat me to it!

It's all in the wrist!

You can see the pernicious influence of George Bush everywhere. Even in otherwise simple things like stock transactions, he and his evil neo-cons and theo-cons have conspired to hurt the little guy at the expense of Halliburton's profits.
No single-share sales for OIL!!!

It's all in the wrist!

Er...

Nope. Not gonna do it.

New record for the trade deficit.

I'm sure that the guy who did this was mortified. Mortified to the degree one would be if one invaded a country against the will of most of the rest of the world on the grounds that the country was a WMD stockpiling threat, only to find that the country didn't have any WMD. Well.

I'm sure that the guy will be fired. Fired just like one would be if.... Well.

Ouch! No take-backs, no kings-x, eh? I would expect someone's going to get a personal reprimand. (BTW, good software design could probably protect against errors of this sort by checking current stock price and asking for confirmation if difference is too great.)

That was for you, Tabare Vasquez, you ridiculous little scoundrel.

Where one door clothes, another opens.

Perhaps the outfit that built the software for stock trading in Japan still has a bright future programming vote machines in the United States.

Some one give them diebold's number. Or the Republican National Committee.

Ooops, spell check: where one door closes, another opens.

I have a problem with homynim and phonetics.

Baldrick, your rapier-like with impresses me.

Ooohh, evil Bush. He invades Iraq, even though Jacques Chirac didn't want him to (hmmm, ever wonder why Chirac and the oh-so-honrable-and-uncorruptible Gerhard Schroeder didn't want the invasion? Could it be because of some nice payola? Naaah, couldn't be. After all, they are honorable Europeans, people whom John Kerry said we should listen to). Ooooh, bad Bush.
Much better that Iraqis can't vote to choose their own government, much better that the rape rooms and human-shredders still exist. Ooohh, bad Bush.

Anyway, Baldrick, you had your chance to fire GWB. Trouble is, you didn't convice enough of your fellow citizens to do so (it is something a majority of voters have to agree on, not just something that the Oh-so-Powerful Baldrick can do on a whim).

There are no bad traders, only bad software.

Or something.

shortstop: thanks for protecting my dignity. You know how I value that!

As someone who works on systems for trading firms and markets, this story has soooo many things wrong with it.

First, you can't just hit a wrong key to swap those two parts of the order.

Second, the ordering software should have caught that the firm was trying to sell more shares than they actually owned.

Third, the market should have caught the error, given that a) the price was out of whack, and b) the shares exceeded the number in existence.

Fourth, the software had specifically been changed to disallow cancel orders while buy orders were being executed - can you say systemic problem???

I see Don P (Tabare Vazquez) is drawn into the thread. Key clue is bringing up France in discussing any topic, especially if it concerns the far East.

I do data entry systems for medical research. Many new systems are direct data entry - no paper. This is a great example of why such systems are very dangerous - not just the lack of error correction, the lack of tests against good sense, the shocking omission of lack of confirmation, but the inability to go back later and determine exactly what was meant by the actual data.

And much of the global investment community is left wondering how vaunted Japanese technology could not overcome a simple human error.

Obviously, these people have never used a VCR

Also - Morgan Stanley walked away that day owning 34% of the company. You can't do that in the US. And they obviously were taking advantage of the situation, knowing full well that it was the result of an error somewhere in the system.

See, POed Liberal. It's true. Bush has undermined the world's financial system to such a degree that human error can now cause large losses.

Please ignore Don P/Vazquez, and actually have this thread devoted to the discussion at hand, rather than yet another Iraq discussion for the local Bush apologists and torture enthusiasts.

Software doesn't kill fortunes. Traders kill fortunes.

Why did they only lose $ 331 million ? 610,000 times 609,000 is 371.4 billion yen or about
$ 3 billion. It looks like only about 10% of their offers to sell a 610,000 yen share for a yen were taken up.

Day traders slacking off ? Sensible computer non gliches that blocked any single buyer from ordering more shares than exist ? Limited greed ?

I mean ok so they lost a few bucks but I don't get how they managed to not lose the additional 2.6 billion or so.

Reminds me of the time I went to an online site and decided to play a bit with their order system. They had some ridiculously large entry field for the quantity.

I tried ordering, say, a million pairs of shoes. This was before entering any credit card info, of course.

Hey, if you give me seven digits of input field I'm gonna try seven digits of entry. Plus letters and punctuation, too.

Obviously I never tried to 'check out,' and the error would have been caught when they tried to authorize my purchase. MY CC limit is a bit lower than that.

>Perhaps the outfit that built the software for stock trading in Japan still has a bright future programming vote machines in the United States.

I dunno, we have that market covered. I think they would do better in the census and redistricting field. Before you know it, Wyoming would have more congressmen than California.

Tripp: I tried ordering, say, a million pairs of shoes....Obviously I never tried to 'check out,' and the error would have been caught when they tried to authorize my purchase. MY CC limit is a bit lower than that.

Loser!

>Obviously I never tried to 'check out,' and the error would have been caught when they tried to authorize my purchase. MY CC limit is a bit lower than that.

You didn't try to negotiate a volume discount?

Ah, the open forum allowed here - Even that leftist Socialist President of Uraguay can post here -

Hey, soccer in Uraguay sucks, Tabare. If you were a real man, you would play Aussie Rules Football.

Kevin:

I realize you are kind of stuck with the LA Times but this is a fairly old story and has been written about in the Wall Street Journal long before the LA Times wrote the story.

Just because the Journal editorals and Op-eds are written by wingnuts doesn't mean that the news in that paper is badly slanted.

Slate had a few articles a couple of years ago that the WSJ editorial staff doesn't even pay attention to the news they print in their own newspaper.

The stories are sort of fuzzy on the math, but I understand that -

a) the software did only let the price drop to 572,000 yen, the lower limit established for the stock

b) since there were only really 14,500 shares in the company, there must have been some limit to how many were traded with counterparties. ie, Morgan only got 4,500.

c) Mizuho Securities bought back a large number of shares, but at a substantial loss

Could this be the premise of a Law & Order episode?

Conspirators steal a large sum of money under the guise of an irreversible stock trading "accident". The homicide is done to cover-up the underlying larceny.

Hey, if you give me seven digits of input field I'm gonna try seven digits of entry. Plus letters and punctuation, too.

What happened when you tried to order 0xFFFF shoes?

The story seems to be also "fuzzy" on what J-Com does. Admittedly, it just a detail, but the LA Times seems to have a crisis in terms of fact checking details. J-Com is not a "unremarkable placement firm." But a new telecommunications company.

After watching the WSJ editorial board on PBS, I believe they only pay attention to each other.

Funny how Paul Gigot tried to appear "moderate" when he appeared with Mark Shields on Jim Lehrer.

The story seems to be also "fuzzy" on what J-Com does. Admittedly, it just a detail, but the LA Times seems to have a crisis in terms of fact checking details. J-Com is not a "unremarkable placement firm." But a new telecommunications company.

No, this specific firm was an Osaka based placement company making its exchange debut, not a telecommunications company.

Something you'll NEVER see in the US:

"The company docked the pay of top executives as punishment for the embarrassing failure of its new software program Nov. 1."

Had it been a US company, that sentence would read:

"The company gave out bonuses to its top executives and then announced a round of layoffs and wage reductions as cost-cutting measures after the embarrassing failure of its new software program Nov. 1."

This is indicative of where the Japanese are putting their computer technology dollars, er, yen.

The Japanese enjoy the most advanced mobile phone system in the world. ("BFD!") Yeah. That's the way I feel. Do you really need to send e-mail and surf the web on a 1.5" square screen?

However, most companies, even large firms, are at least two generations of software and hardware behind Europe and the U.S., and claims of the level of broadband availability are greatly exaggerated.

Jeff II,

As well as the most advanced system, they, as well as Hong Kong, allow betting by phone on horse races. The Japan Cup day has a tremendous handle. Imagine, "But I meant the 3 horse".

Had it been a US company, that sentence would read:

"The company gave out bonuses to its top executives and then announced a round of layoffs and wage reductions as cost-cutting measures after the embarrassing failure of its new software program Nov. 1." Posted by: Elmer McJimsey

Yes. Contrast this with Ken Lay who is now making speaking engagements prior to his trial on how he did nothing wrong, he's proud of what Enron did, and he is being persecuted by the federal government. Asshole.

The real price was $5000+ PER SHARE??? WTF? Somethings fishy; no stock is priced at $5000 per share - you do a split once it gets over $100.

Berkshire Hathaway class B shares traded at $72,000 a share at one point. Warren Buffett didn't want them split, they stayed unsplit.

Obviously Al has never heard of Berkshire-Hathaway or Warren Buffett...

Obviously Al has never heard of Berkshire-Hathaway or Warren Buffett...
Posted by: grape_crush

Come on. We all know that Al lives in a world all his own completely uninformed by the real world.

Dammit! royalblue_tom beat me to it by less than a minute! Damn!

This isn't a software glitch, it's Lord of the Flies. As tinfoil points out above, Morgan Stanley ended the day with 34% of the company at day's end. The Tokyo Stock Exchange could have fined the initial trader some large non-trivial amount and voided the trade entirely. Some of the benefactors would have been pissed but on what basis could they claim to keep their windfall? By what rational market basis did Tokyo Stock Exchange let the transactions stand?

The purpose of an exchange is to provide capital and liquidity for public enterprise, not carrion for vultures. Rather than make a stand based on the integrity of the exchange the TSE revealed the true ethic of their market - get rich without doing anything of value.

The TSE is suffering because the blind greed of their members was exposed, not because of some software glitch. It's the human software that is corrupt here, not the zeros and ones.

$331 million? Bah, a mere bag of shells.
If I'd done that I wouldn't lose any sleep over it. Now, if it was the fault of the hired help...

If Saddam was so horrible then why did the US government support him so completely throughout the 1980s (while Reagan and GHW Bush were presidents)?

Why did GHW Bush lie to Saddam about our likely response if he invaded Kuwait?

Why did GW Bush have to lie about nukes and sundry other details to take us to war?

Why why why?

By what rational market basis did Tokyo Stock Exchange let the transactions stand?

Especially when, by their own admission, the TSE market system was partially at fault for processing Mizuho's cancel-order request. Shouldn't Mizuho have a reasonable expectation not to bear the full brunt of the loss when the TSE contributed to the problem?

Japan right? Did the trader then have to fall on his sword?

>Japan right? Did the trader then have to fall on his sword?

Nope, that is the classical Western method. The preferred honorable suicide in Japan was ritual disembowelment. :)

>Japan right? Did the trader then have to fall on his sword?

Nope, that is the classical Western method. The preferred honorable suicide in Japan was ritual disembowelment. :) Posted by: MJ Memphis

Actually, ever since the collapse of the Bubble, the most common methods have been jumping out windows or stepping in front of trains as they come into the station.

Seppuku, crudely, hara kiri (literally, cutting the midriff) was the provence of samurai. Just folks didn't get to do that because, most importantly, they didn't get to own swords of any kind.

>Actually, ever since the collapse of the Bubble, the most common methods have been jumping out windows or stepping in front of trains as they come into the station.

Well, sure, that's fine if you're just looking to end it quick. But nothing says "I'm sorry for losing those hundreds of millions of dollars" like a good seppuku.

"We are very sorry to have caused such huge trouble," exchange President Takuo Tsurushima said at a Tokyo news conference Sunday. "I regard it as a very significant matter and will consider how to take the responsibility, which includes my resignation ...

We could use a little more of that here in the States.

cragie,

What happened when you tried to order 0xFFFF shoes?

That's the weird thing. The software did have an upper limit, so that very large numbers became negative, but it wasn't at the normal 0x7FFF boundary. I didn't play with it long enough to find out exactly what the problem was.

Well, sure, that's fine if you're just looking to end it quick. But nothing says "I'm sorry for losing those hundreds of millions of dollars" like a good seppuku. Posted by: MJ Memphis

Exactly! Just shows how soft the country's become. I mean a good quality chef's knife (santoku-style being best) stands in quite well I'm sure for the dagger that samurai used to carry for this purpose.

Yeah, and any Japanese gardener worth his salt would use his Hori Hori if any roses had black spot.

Hori Hori is an excellent gardening tool, BTW. Ann Lovejoy of Bainbridge Island fame first wrote about the knife in the P/I.

Why is everyone picking on poor Morgan Stanley? I thought UBS were the big buyers.

Anyway it looks like the Japanese government is going to shame those greedy Western companies into giving back their (cough) hard-earned (cough) money. Is nothing sacred?

Bainbridge Island fame first wrote about the knife in the P/I. Posted by: thethirdPaul

I can think of only one other regular poster besides you and me who knows Lovejoy and Bainbridge Island. I wouldn't mind living there (Bainbridge Island, that is).

>Anyway it looks like the Japanese government is going to shame those greedy Western companies into giving back their (cough) hard-earned (cough) money. Is nothing sacred?

First those hard-working Enron traders have to give back their bonuses, now this. What is the world coming to?

You get fired and get a job with the government.

The sad thing is that almost the same mistake occurred four years ago on the same market.

The sad thing is that almost the same mistake occurred four years ago on the same market.
Posted by: KCinDC

Nice contribution KC. Do you follow the Tokyo market or just finance in general?

I saw this item in the "local" papers when I arrived in Tokyo last Friday. The TSE is forcing them to make good on the order, which is basically a self-inflicted short squeeze. Someone else, the people who sell them the shares to cover the order will be making a profit equal to their loss. This opens up the possibility of a conflict of interest on the part of the TSE since members of their governing board are likely among those on the receiving end of the windfall. Such shenagians have happened in reverse in US markets when a member successfully has executed a short squeeze on the other members who happem to constitute a a majority of the governing board. On the bright side, the loss is a typical quarter's profits for Mizuho, so no one is shedding any tears for them.

Exactly! Just shows how soft the country's become. I mean a good quality chef's knife (santoku-style being best) stands in quite well I'm sure for the dagger that samurai used to carry for this purpose.

Dagger? I thought traditionally the wakizashi was used, which is hardly a dagger.

Updates from the BBC. Local media compare the profiteering on this erroneous sale to "stealing furniture from a burning house." There is now increasing pressure on those who profited to retunr the cash and many, out of a sense of honor (common here, not so much in US markets), have agreed to do so. The real crisis is one of confidence in the TSE and that's a biggie for any stock exchange. Is the current computer system up to snuff for a 21st century market? Where are the failsafe mechanisms? Until those issues are resolved, foreign investors are likely to shy away (all paraphrase of the BBC report here in my hotel near Shinjuku Station).

How about 3.028e38 shoes?

KCinDC beat me to it. I remember that incident clearly because I knew someone involved in the IPO, and had talked to him in the morning before the market opened. When I got to the office later that day, I had a co-worker come up and say, "Say, did you hear what happened with Dentsu?"

The surprise to me is that it happened AGAIN. Shouldn't they have put in safeguards?

>Dagger? I thought traditionally the wakizashi was used, which is hardly a dagger.

Depends. The wakizashi could be used, but the tanto (dagger) was also acceptable. Generally it didn't make much difference- a wakizashi would usually have most of its blade length wrapped so the samurai could hold the blade without cutting his hands, given that the wakizashi was too long to easily wield by the hilt for the operation. The way it was explained to me, many seppukus involved fairly nominal cuts across the abdomen- the cuts were not deep enough to cause death on their own, and death instead came from a second wielding a katana to decapitate the samurai.

nbnbnn

Now that guy wishes he had gone into Medicine, where when you fuck up, you only kill somebody.

It is so stupid. When making such a big transaction, the software should ask for a confirmation, and even for a reconfirmation. It is ridiculous that it's a "one click" buy or sell!

Aboujouj
We promote!

Dagger? I thought traditionally the wakizashi was used, which is hardly a dagger. Posted by: cmdicely

As I've spent twenty odd (sometimes very odd) years off and on in Japan and speak Japanese, which you don't, don't argue.

The shorter "sword" samurai carried are commonly translated as "dagger." I would hardly call something as short as 12" a sword (well, not outside the bedroom anyway). And when committing seppuku is wasn't like samurai were disemboweling themselves clear through their backs. Therefore, in the absence of historically significant blades, the ownership of which is illegal in Japan, a good chef's knife would more than due the trick.