But the reality is, we don't know because Joyce hasn't told anyone what precisely went wrong. Given that it was (allegedly) just the market-making unit, the more apt picture might be the one at top left, where like Knight, our lovable "hero" Mickey, enlists the help of some servants, magically conjured, to speed the completion of his tasks at least effort. Of course he wasn't in full control of what he conjured with predicatble results.
Sound familiar? But such episodes are not limited to, nor even more prevalent than, technology, as Mssrs Kerviel, Leeson, and Adoboli can attest. Indeed, during my last year of university, and first years thereafter, I cut my teeth at one of the largest and most venerable bullion dealers. Though mostly upstairs, I spent a reasonable amount of time down on the floor in the weird and wonderful world of the Comex, a place where (unlike the Dukes Bros of OJ fame) one appreciates the size and depth of the market. It wasn't glamourous. Nor was it noble. But it was crazed and exciting. And there, one strange August afternoon, I bore witness to a similar algo failure in Gold Pit of 4 WTC. One floor trader, who'd gotten long, and then very coked-up (not the "I'd Like to Teach The World To Sing" variety) and not necessarily in that order, became convinced that he, in his coca-omnicience, was not only incredibly right, but omnipotent, proceeding to single-handedly buy everything and anything in order to move the market upwards, (a Knight-like programming error if ever there was one) until, under the weight of the market, and his losses, like Knight's algos, he too was forcibly turned-off and shut down, whilst everyone around him rubbed their eyes and shoook their heads in disbelief (before of course they proceeded to cover their shorts). It truly is a wacky world, one that Mr Joyce must, at present, be regretting.
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