Flash Crash 2010 | VPRO documentary | 2011

Money & Speed: Inside the Black Box is a thriller based on actual events that takes you to the heart of our automated world. Based on interviews with those directly involved and data visualizations up to the millisecond, it reconstructs the flash crash of May 6th 2010: the fastest and deepest U.S. stock market plunge ever.
Money & Speed: Inside the Black Box is developed by filmmaker Marije Meerman in close collaboration with design studio Catalogtree. This explorative documentary is a marriage of strong storytelling and meticulous visual analysis. This film is also available in English as an iPad-app in the Apple app store as the world's first Touch Doc.
TO THE APPSTORE:
itunes.apple.com/us/app/money...
Originally broadcasted by VPRO in 2011.
© VPRO Backlight January 2011
On VPRO broadcast you will find nonfiction videos with English subtitles, French subtitles and Spanish subtitles, such as documentaries, short interviews and documentary series.
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www.VPRObroadcast.com
Credits:
Director Marije Meerman
Design Visualisations: Catalogtree
Research: Gerko Wessel
Photography: Maarten Kramer
Sound: Eric Look
Editing: Rinze Schuurman
Music: Joris van Gunsven
Programmer: Systemantics, Noodlewerk
Financial Data: Share Company, Nanex, Tickdata
Re-recording mixer: Jaim Sahuleka
Color Grading: Jeff Grosveld
Producer: Mariska Schneider VPRO Backlight
Project Management: Gert Jan Kuiper, Gerard Meijer
Commissioning Editors: Henneke Hagen, Jos de Putter
English, French and Spanish subtitles: Ericsson.
French and Spanish subtitles are co-funded by European Union.

[@vprodocumentary]

NEWS NEWS NEWS! We have a vpro documentary, Telegram channel! Check it out for new uploads, spread the word and join! 😉 t.me/vpro_documentary

[@CaseyC104]

"You could go out for a cup of coffee, come back and find you lost a billion dollars. That would ruin your day." That quote is the best thing I've heard in a long time.

[@sgt7]

That would be the most expensive coffee in history.

[@Jatin19902]

me too.

[@ktolwal]

Aliens did it, how is it that no one figured it out

[@KeithFlint350]

and the key word here is DAY

[@Tampa0123456789]

But isn't it two way street? You could go to lunch and then return a lot wealthier.

[@FutureStoics]

I feel sorry for all those stop losses that got stopped out in that flash crash

[@Skim26]

When an SEC agent is an ex trader from the Lehman Brothers... no wonder they want to strictly follow the no disclosure laws.

[@rambow70]

A lot of government regulation has by nature a "conflict of interest". The only way to get people who really know the industry well enough to regulate it is by hiring those who have worked in it their entire lives. Judges are old lawyers, secretaries of treasury are ex-Goldman Sachs executives, and SEC agents are like you mentioned ex Lehman Brothers. It stinks but it is everywhere and it makes sense to a level of why it is but I agree, maybe it should change, these are the real conversations that need to be on the news.

[@bluemeriadoc]

Also, it's the law

[@Wamsuo58u]

@@rambow70 you don't need to work in those industries to understand how they work though. It's just corruption.

[@JohnDoe-sp3dc]

That sort of private to public transfer is a huge problem in America. I mean why the fuck do we have Ajit a fucking former Verizon employee now working as the head of the FCC who should be regulating Verizon? It's asinine.

[@451degreesF]

This is a brilliant documentary, I love the visual style and the balanced selection of speakers...

[@greigsanderson9673]

I wish there was more amazing clips like this on KZbin. Love them

[@TheAverageJoeee]

the mysterious "major investment bank" is goldman sachs for those who are wondering

[@vprodocumentary]

We didn't say that.

[@crillin666]

My sides are hurting from laughter after reading that

[@8118is8]

I was trading when the flash crash took place. words cannot describe how flashly it was

[@NOVAsteamed]

Were you working at a bank? How did people react and what did they do at the moment?

[@jgfunk]

kzbin.info/www/bejne/e2LbooaQrp6Saqs

[@sagarpatel2630]

Obviously u hadn't seen typical interventions of central bank of Japan on USDJPY.

[@fitnesspoint2006]

This Hundsader character is like 1000x smarter than anyone over at the special team created by the SEC

[@infiltr80r]

SEC has smart people. They're just corrupt.

[@richardclarke376]

I'll never forget it: I was sat as usual coding when all of a sudden I heard shouting from the traders. I thought one of them had a heart attack or something. Then my screen lit up with alerts. Wow.

[@b.l.m2427]

Interesting , you thought someone had a heart attack.

[@whitesky18]

Such a well done program - I had to subscribe!

[@taylorfischer5921]

Look at that crappy parking job at 31:39

[@yoyi4598]

must be my mum driving...

[@edblair5253]

The smoking gun

[@parrotraiser6541]

not only taking up 2 slots, but facing in the wrong direction.

[@tremoo5987]

Toyota Sienna knows no boundaries

[@XzhiTBK]

He fixed his parking after the film got cut.

[@DumbledoreMcCracken]

48:01 You are risking all your money, but if everything else collapses too, you're still risking all your money even if you aren't in the market. It is a Catch-22. You can't escape the risk.

[@leggoego]

Imagine how rich you would be if you could have entered long at the bottom of the crash haha

[@tradingquebec943]

gl with a 36 seconds delay

[@XzhiTBK]

@@tradingquebec943 Hahahha. Try trading millions on Bitmex and having a 1 minute delay during big moves designed to fuck as many people over as possible.

[@rtkevans]

I was trading the ES futures that day and learned that my broker, IB, busted a lot of arbitrage trades that day. Even if you think you won, at the end of the day the broker made sure you didn't cash out on the crash.

[@Aaron565]

@@rtkevans since when is arbitrage illegal, and how can a broker decide what to execute? how did they take advantage of the flash crash?

[@wntu4]

Not rich at all. Trades were broken so...you gained nothing and you lost nothing.

[@gintaras58]

thanks for uploading! Dutch people are very smart noticing small machinery pitfalls and able to present to everybody in such an easy to understand way...I subscribed for this channel...after watching this...

[@alexcastro7339]

"WE CAN'T STOP THE SELLING!!"... That dude is hilarious

[@rtkevans]

That's Ben Lichenstein, but I heard he stopped squawking the S&P pit

[@harrykanhura4178]

So the machines' algorithms were proving each other to find their buy and sell limits?! What a brilliant engineer that wrote the script that found the trigger point at which got to push the others' algorithms to execute sell orders on the way down even at a loss!

[@tedcarl5382]

Understated comment!

[@richsenyor6641]

Rich ass professor double parking a van.... Priceless

[@nolanmcdeezy9007]

had to throw ass in there

[@armv7-m603]

Anyone rich doesn't drive a chrysler minivan..

[@edblair5253]

That old piece of shift Toyota?

[@eskimoto4417]

cause hes a gangsta typer

[@nonjabusiness4360]

This is scary on so many levels...

[@ferasalhati8713]

Indeed...

[@diogofarias1822]

Why?

[@Abdlnasr]

Startling documentary. Please keep these coming, you may well be documenting the end of life as we know it.

[@bodyevolution8516]

The group responsible for the crash is: Goldman Sachs. Evidence: 1300 Federal Blvd. Carteret, NJ is the building next to Nasdaq servers which belongs to Goldman Sachs. Why would they crash it? It was a sophisticated trading strategy: knowing that they are market movers and now with their advantage of having information before anyone else, they can theoretically and technically place trades so fast down that the other investment companies would think there’s a crash causing lesser sophisticated algos to do weird things such as sell at one cent, while being delayed in the data when the market moves up. The bottom line, Goldman Sachs just sold almost if not exactly at the peaks and bought at the bottom (a hundredth of one cent). Keep in mind, that it’s 2010, 2 years after the 2008 market meltdown. QE had just begun by the Fed in 2009 to save the global financial system... although the market regained most of its losses through 2009-2010, there was real uncertainty that QE wouldn’t work. So, it would make sense that hedge funds would head-fake one direction but then go the other. Investment company like Waddell & Reed has sophisticated algos that prevented them to lose so much wealth in 5 minutes, that’s why they were glad to hand over their data to figure out who bought their contracts only to be sold with fury. Goldman Sachs made billions in 5 minutes as their algos were set for a head fake, just sick. The SEC cannot by law disclose the culprit as Goldman Sachs and they are the market maker and dealer for US Government treasures. Laws harboring criminals, change it!

[@watchfan89355509]

What really stuns me is when Paul Wilmott said at the end of the film....

[@BramStolk]

Indeed. Also what the quant said is surprising. Long term those +5% years add up, and more than make up for the rare -50% years. Someone so smart should know better.

[@kecapmanis4191]

I think one of the big mystery is how all those algo from different firms in play during the crash decided they reached equilibrium at the bottom and decided to rally, surprisingly to the roughly same level as before the crash happenned.

[@suryabahubalendruni2817]

+Kecap Manis imo it's the weirdest part of it all. it's not like all of the algo's these firms run are going to have code consistent with one another to handle this precise situation. very bizarre

[@kecapmanis4191]

Perhaps there was one dominant algo that caused the "turning point" and other algos thought the price has reached bottom and started to rally. Chaos Theory? Understandably the rebound is quite as fierce as the drop. I like to think of it as a stretched rubber band.

[@gilmijar]

+Kecap Manis Not a mystery. Algorithms may be different, differently designed and executed, but the goal behind all is the same - save assets in the event of a crash. That is convergence and that's why they all seemed to rally. The next big thing will probably be an algorithm that handles a crash in such a way as to make profit (short sales?). The race is probably on right now, just no apparent winner just yet.

[@rustalisin8950]

+Kecap Manis No mystery.. had sloppy algos in 2008.. dumbass moves like pull out 500 contract at last market depth position ,, so it looks like a serious buy.. that strategy is easily picked up now,, my algo does it , an the computer laughs.. i dont have time to even look at it..Only diff is that i start a bank that is transparent, an believe me u cant have a bank without algo.\ The market wipes other institutions out .. thats why it went down that far, its no mystery when its War. Much improved on bullets , dont u think?

[@thefowlyetti2]

31:40 terrible parking :(

[@BeatsPlanetMusic]

Awesome show, really enjoyed it

[@SlothPossum]

who is that maniac announcer/commentator guy reacting to the crash, it's played throughout the documentary?

[@MrNightWalkerz]

I think that is Jim Cramer from Mad Money. Its mostly good for entertainment, mainly from laughing at his antics.

[@SerpentInside]

Economic news commentator for some major media crap.

[@garrystoelk458]

It’s actually a KZbinr kzbin.info/www/bejne/lWPOdp2QiLKdbKs

[@rtkevans]

His name is Ben Lichtenstein I think, he used to squawk the S&P pit at the CME.

[@Penguin_of_Death]

@@garrystoelk458 Some is him, but Jim Cramer is definitely in there too

[@nalind13]

Awesome work vpro :)

[@vprodocumentary]

Thank you so much! We really appreciate your feedback.

[@Smith34567]

Amazing how the "regulator" lol, was the only one who missed it, says it all really .....

[@RobertoSantander]

this is the time of the year

[@DrCruel]

Basically the practice of wholesale robbery has been automated.

[@Penguin_of_Death]

Anyone else infuriated by that parking at 31:43 ?

[@tejasvahalia]

Excellent documentary.....really insightful.

[@vprodocumentary]

Thanks Tejas Vahalia!

[@pikminlord343]

a great breakdown

[@171TITO]

@4:28 that's a really sharp knife

[@MyronGanes-jl2ot]

Now 2020 we're seeing the biggest crash since the 2008 market crash.

[@HipHopBeatSource]

I was thinking the same thing

[@eddyvideostar]

To Myron, Hip-hop, and community: The 2020 crash has gone viral with its virus akin to Chinese water torture. The markets going forward into April; will jiggle around, making traders believe there is temporary reprieve -- then, the *horsemen will hit the markets* and the global community continuously with more feather tickling wake up calls from the Most-High -- until the feathers turn to lead!

[@Bitachon]

*Yes. Thank you Corona*

[@ifukill7538]

It's why we are here😊

[@mikeblack9109]

Quants are so smart, i admire them

[@Idontgivechainsaw]

Good documentary.

[@bluemeriadoc]

This is why we have Monte Carlo simulations. Also these guys missed out on a lot of upside since '09

[@ziondarden2276]

What is the name of the software being used at 7:00

[@VR_Wizard]

46:30 When I heard that they use evolving algorithms to let the computers learn how to trade better that blow my mind. Maschine learning techniques made such great leaps in the last years it is clear to me that they use them for finance as well.

[@grandami3593]

Christoph G. .

[@eskimoto4417]

na they use em for porno not finance youre wrong brother jiu jetsu man

[@SamuelHenrique-dp4md]

In summary it was very well planned by more than two big and laraged players.

[@Spudst3r]

21:22 You can tell this guy is really good at his job.

[@grandami3593]

kenektik J

[@tradebrah]

48:02 nice sentence to end on. However, there's a thing called a stop loss hahah

[@firlifanzhich236766]

What a great documentary. Dank je wel vpro.

[@Xdrakemanx]

Rishi Narang seems like the only person they've interviewed who's knowledgeable enough to speak intelligently about HFT. Wilmott, after all, is a mathematician, not a practitioner.

[@manishsharma3408]

vpro u r doing a awesome work. i really appreciate your work. Hope govt do something for such gamble a kind of cheating from investors.

[@vprodocumentary]

Thank you for your message.

[@bundleofperceptions1397]

I think the flash crash was done on purpose as a way of demonstrating what would happen if AG Holder sought to prosecute financiers for the 2008 heist . . . I mean crash.

[@tz4217]

No

[@DataJuggler]

This is why the stock market should be taxed 1/10 of 1 percent instead of personal or corporate income tax. The only group that wouldn't like this is high speed traders and IRS agents.

[@LemonChieff]

Just imagine the scalpers who were shorting on that day with a take profit

[@kennytheclown3859]

Good stuff

[@vprodocumentary]

Thank you! You might also like this one: kzbin.info/www/bejne/m5WVd4qEjNx4aas

[@rambow70]

Could you imagine if you by some freak luck placed a trade during the flash crash and your order was filled for pennys on the dollar? Or if you sold your position before the news broke, because it said the news lagged behind what the markets were doing, and got pennies on the dollar for your trade only to find out that the stock return to normal shortly after? Must have been a hell of a day.

[@siyathemba4620]

what the software they are using?

[@michaelbasher]

This awareness is like code.

[@aluisious]

This is an excellent video. I think it's interesting right at the end where all the guys involved say they don't own stocks. I think it was 2012 I came to the same conclusion, that the potential gains in stocks was not worth the huge risk. I keep all my former investment money in cash and only trade some options, infrequently, when I think the odds are stacked in the favor of the contract. It's gambling, but all stocks are gambling. At least I know it's gambling and wait for good odds.

[@DataJuggler]

43:30 I think this guy would make a good actor.

[@edosualdo]

Does anybody know how to spell the name of the guy who believes on high-frequency-trading (introduced at 9:22)?

[@karllogan5084]

Do you know who Paul Wilmott is??? The man is a living legend in finance. He is basically a god of quantitative analysis.

[@traderlincolnmitchell9786]

good video

[@ralphwalters906]

A good piece of advice, listen well... 48:03

[@no-rj2ez]

Navinder Singh Sarao no mention of him ?

[@eviln00b69]

12:35 weird seeing that I live right down the highway from that. Like 15 minutes tops.

[@peterbradshaw8018]

Larry Harris weote a nice short paper on this for the CFA.

[@TENNSUMITSUMA]

7:56 'Steve jobs didn't die....' Hmm....

[@nolanmcdeezy9007]

its a conspiracy jk

[@grandami3593]

Y

[@scholargnome]

This actually interesting. It could make or break whole industries. It is like a window to the trading of the richest companies making money off the less well off traders. It's frightening.

[@JDono64]

Nice work.

[@CodigoTrading]

¡Te felicito por el vídeo! Ha sido una inspiración para mi canal, donde acabo de colgar un vídeo hablando de los Flash Crash ¡Pásate si te puede interesar! Saludos

[@Asist0ne]

Now to work on the biggie/smalls crash of 3/09/2020 because of corona virus.

[@exsanplusplus3811]

this is the time of the year, yeap !

[@boobaliz]

Many hackers have disapeared of the web-hacking scene these last years. Now i know what they are doing ... ;)

[@js93b]

High Frequency or not would you when huge companies like Goldman Sachs have an obvious advantage?

[@UnhingedBecauseLucid]

47:45 --Paul Wilmott--Quant Professor. ;) Now there's a precious fucking quote right there... ...would welcome an extensive and wide ranging interview of the man... perhaps with Emmanuel Derman...

[@milesdisney6626]

What was that address? 600 Commercial Drive in someplace new jersey?

[@shadow3brigade3SBX3]

39:40 the deepest meaning of notime time

[@algerhistogram]

31:38 worst parking job ever

[@tremoo5987]

Haha, the shitbox's engine probably died and he luckily glided it into a parking lot.

[@243wayne1]

@@tremoo5987 -WRONG. The engine of the Toyota Sienna will outlast whatever vehicle your driving by 300,000 miles. And that is IF and when your vehicle gets to 200,000 miles. Class dismissed.

[@wilsonjing]

Soooo who bought at the bottom that day?

[@sexyanto]

@22:10 This guy threw the major shade ever... He basically saying It is one thing to be stupid but it is a sad thing to be stupid and not know it... lol

[@v.prestorpnrcrtlcrt2096]

"I saw that panic, so i put on cnn," said the american

[@turboredcart]

Has this been fixed yet?

[@raglanheuser1162]

who is the guy narrating the stock collapse. hes amazing

[@dabaddestbob]

Anyone know the app they use on their ipads/show on the screens w the red graphs?

[@dabaddestbob]

+dabaddestbob yello? anyone?

[@heinrichb]

+dabaddestbob I'd love to know that too.

[@prowarslamable]

+dabaddestbob I also need to know.

[@vprodocumentary]

Hi all, it's the Money & Speed app, an interactive documentary: itunes.apple.com/nl/app/money-speed-inside-black-box/id411884445?mt=8

[@dabaddestbob]

Thank you!!!!!

[@Haroldp72]

cool

[@mitchwilliams1377]

Price quoted does not necessarily mean last filled,does it?[25:43]it's just a quote,right?[25:58]

[@EmmMacken]

It'd be possible to introduce the ability to source where trades are coming from.

[@buzzarmstrong407]

the historian says every time you buy a computer it goes twice as fast. Hasn't been that way for at least several years.

[@jholid6y]

If u had some put options, would be a very good day for u

[@tonysamaniego7875]

The camera work in this film is aweful

[@simonclasse9435]

12:16 that's beautiful

[@iamgionism1453]

It is 2019 the market is at an all time high I predict a crash is bound to happen if not by the end of the year is going to be like 3 months into 2020 I will then be buying hella puts and become a millionaire 😎

[@eliasbouhout1]

Good luck bro

[@fantasyfootball8625]

Congrats hope you did

[@mralwaysbored]

Are you a millionaire yet?! If not I hope this week makes you one..

[@Bitachon]

*Did you buy puts and become millionaire?*

[@steve3in142]

iAmGionism how did that work out for you 2020 April now virus time

[@puppetmasterblaster]

You are just one rogue algo away from losing your retirement : )

[@Wamsuo58u]

Stock market is a scam lol

[@parrotraiser6541]

George Dyson is Freeman Dyson's son, (and the spitting image of his father).

[@maryh4459]

Sounds like a program change and needed to reboot......the virus was installed

[@chrisferrell2663]

If someone didn't know what they were doing, how could we blame them? If someone knew exactly what they were doing, how will we ever catch them? Quite a predicament....

[@daddyw1719]

WTF?! A hedgefund manager says he doesn't put his own money in the market!??

[@chanbla11mit]

what i don't get is why the SEC isn't allowed to disclose to the public all the information i mean this is a crisis that affects the whole nation, as a democracy pledged to serve the people shouldn't the US gov be as transparent about this as possible?

[@paulturner956]

if you don't know you are very naive, it fucking obvious

[@karllogan5084]

hahaha Finance costs and revenue aren't disclosed separately on a I/S when it's a financial company.. It's just pushed into operating costs. And what do you even mean? Trades don't need to be disclosed on any financial statements, it isn't required for private companies to even disclose basic financial statements to the public.

[@Ravidist]

Maybe I'm high, but did that SEC regulator just tell us he can't disclose the owners of a trade made in PUBLIC stocks, on a PUBLIC stock exchange?

[@ifukill7538]

2020 😱

[@kevinkevinpham]

haha the fact that you said "dude" and took the time to state the threat, it sounds like all talk...

[@msimmons2]

This is one topic I completely do not understand. Is there a stock market 101 for dummies to understand how to read the numbers and what to look for?

[@cmwslw]

31:39 - nice parking job