An interesting commentary appeared on BBC news about yesterday’s plunge in
US stock markets due to Greece’s continuing debt crisis:

“Computer trading is thought to have cranked up the losses, as
programmes designed to sell stocks at a specified level came into
action when the market started falling. ‘I think the machines just
took over,’ said Charlie Smith, chief investment officer at Fort Pitt
Capital Group. ‘There’s not a lot of human interaction. We’ve known
that automated trading can run away from you, and I think that’s what
we saw happen today.’”

Here the trader differentiates between two kinds of “panic” process
that both appear to the observers of the market as falling stock
prices: selling spells generated by machine interaction versus human
interaction. He assures that this time the plunge happened because the
machines were trading. This is a different kind of panic than what we
conventionally think of, one that is based on expectations about
European government debt, which escalates as traders are watching each
other’s moves, or more precisely, “the market’s” movement. Which kind
of panic prevails seems to be specific to the trading system of each
type of market. Another trader reassures us that today’s dive was “an
equity market structure issue, there’s no major problem going on.”

It is interesting that the traders almost dismiss the plunge as a periodic
and temporary side-effect, automated trading gone wild. Real problems
seem to emerge only when humans are involved. But if machine sociality
can crash a market and have ripple effects to other markets, then
perhaps the agency of trading software should be recognized.