peHUB Second Opinion 5.14.10

Fat fingers, zipped lips: The identity of the seller that sold e-mini futures for 13 minutes straight, all the way down, between 2:37 and 2:51, creating such a massive lack of liquidity that the entire Dow Jones Industrial Average lost 1000 points of value in only minutes and spurring emergency Congressional hearings: Waddell & Reed. Consider, for a second, that both Waddell & Reed and CFTC Chairman Gary Gensler knew this information before the Congressional hearing, but they sat on that until Reuters reported it. This is why the world needs the press.
Related: If one e-mini trade can take down the entire market, it has escaped no one’s notice that our markets are held together with bubblegum and paperclips.

The Euro: Still in a stroller, embarking on a long weekend trip downwards without the comfort of any more sippy cups in the form of emergency shock-and-awe bailouts. If you’re nervous, consider the miserable parents, the Eurozone, who are the verge of divorce.
Related: The IMF wants everyone to stay nervous. This could happen to you.
Related: The US is not like Greece. Yes it is. Except we have government-sponsored healthcare now, and Greece has to get rid of it.

Goldman: Allegedly winding down one of its prop desks. We think it traded large blocks of shares of “too little” and underwrote derivatives on “too late.”

Venture financing: Does high-quality venture financing equal entrepreneurial success? Science says yes.

Irony: Bear Stearns and Merrill Lynch saw, warned about and recognized the bubble that would eventually kill them. We guess that makes them like those cops in the movies who talk about being so glad to retire after 30 years of service, then got shot the day before they retire and get avenged by Mel Gibson.

This week: officially over. See you all Monday.