Description: Theories about yesterday’s stock market swoon, where within a matter of 20 minutes, the stock market plunged by 1,000 points and then nearly completely recovered, are abounding. Fortune asked Rishi Narang, founder of the hedge fund Telesis Capital and author of Inside the Black Box, to share the theories he’s heard and handicap them in terms of likelihood and plausibility.

Source:  CNNMoney.com

Date: 05/08/2010

Link: http://money.cnn.com/2010/05/07/markets/market_swerve.fortune/index.htm
 
Questions for discussion:

• What were the possible explanations given for the sudden stock market change in values?
• Which one do you think is most likely correct?
• Explain how liquidity influences the setting of prices?