Jon Stewart on Last Week’s Stock Market Crash

In this clip, Jon takes Wall Street to task for last week’s big drop.  He describes Wall Street as “a big casino, rigged to the benefit of a handful of taxpayer subsidized investment banks concealing their machinations behind a scrim of impenetrable jargon.”

And then he starts to lay into Wall Street’s excuse of the week …

Jon wonders how often Wall Street can use the “perfect storm” excuse …

“Why is it that whenever something happens to the people that should’ve seen it coming didn’t see coming, it’s blamed on one of these rare, once in a century, perfect storms that for some reason take place every f–king two weeks. I’m beginning to think these are not perfect storms. I’m beginning to think these are regular storms and we have a sh–ty boat.”

Just to follow up, Jesse has a good write-up of his recent talk with a Wall Street trader in “Trading in Hubris: Pride, Overreach, and the Inevitable Blowback and Consequences.” It’s worth reading.

And speaking of last week’s plunge, Barry Ritholtz offers up “the best analysis I’ve seen from a young analyst on an institutional desk”:

It boils down to this: this episode exposed structural flaws in how a trade is implemented (think orphaned algo orders) and it exposed the danger of leaving market making up to a network of entities with no mandate to ensure the smooth and orderly functioning of the market (think of the electronic market makers and high freqs who can pull bids instantaneously as opposed to a specialist on the floor who has a clearly defined mandate to provide liquidity).

Be careful out there.

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