New Dark Age: Technology and the End of the Future

by James Bridle

On May 10, 2010, the Dow Jones Industrial Average, a stock market index that tracks thirty of the largest privately owned companies in the United States, opened lower than the previous day, falling slowly over the next few hours in response to the debt crisis in Greece. But in the early afternoon, something very strange happened. At 2:42 p.m., the index started to fall rapidly. In just five minutes, some 600 points – representing billions of dollars in value – were wiped off the market. At its lowest point, the index was a thousand points below the previous day’s average, a difference of almost 10 per cent of its total value, and the biggest ever single-day fall in the market’s history. By 3:07 p.m. – in just twenty-five minutes – it recovered almost all of those 600 points – becoming the largest and fastest swing ever. In the chaos of those twenty-five minutes, 2 billion shares, worth $56 billion, changed hands. Even more worryingly, and for reasons still not fully understood, many orders were executed at what the SEC called ‘irrational prices’: as low as a penny, or as high as $100,000.27 The event became known as the ‘flash crash’, and it is still being investigated and argued over years later.