"Amazingly, as stocks were diving downward, willing buyers were locked out of purchasing"<p>This is Just Plain Wrong. The post offers no evidence for this. For my evidence I'll use the fact that trades were occurring at almost all price levels, which is why some had to be canceled. For the stocks that "went to 0", that in fact means there were no willing buyers for anything other than $.01 (I doubt any trades actually occurred at 0)<p>"There has to be some explanation, and I can't imagine why it would take days, or even hours to figure out how a $50 stock could get to a price of $0 with no one able to purchase as that price is dropping"<p>Yes, the answer is that when a deal looks too good to be true, you check it out for at least another second (or perhaps 10 minutes, the duration of the "flash crash") before you put millions to billions of dollars of money into something. Again, I reject the idea that no one was able to purchase at any point.
I don't think this guy really understands the issues at hand. I'm pretty sure we know EXACTLY what happened, just not WHY. Which is exactly why his "10,000 foot view" is completely useless.
I think the author underestimates the problem of finding an explanation out of the mess of data that's available. It's possible there could never be a simple explanation of what caused the sell-off. It could just be that 1) we need more measures in place to reduce this kind of volatility, 2) we need less protective measures and let market corrections happen on their own, or 3) accept that this can happen and handle the next event the same way this one was handled.<p>I've read some articles suggesting that the drop was more dramatic because automated trading systems were taken offline. I've read that the drop was more dramatic because some stocks are sold on multiple markets with different emergency stop conditions.