A recent item in the online edition of London’s Daily Mail reported that a stock trader in Japan had executed an erroneous trade that sent stock markets across Asia tumbling and led to his brokerage losing some 27 billion yen (about $227 million U.S.).
The trouble came when Mizuho Securities, Japan’s second-largest bank, tried to sell 610,000 shares of a recruitment agency, J-Com, at one yen (less than one cent) each. The trader actually meant to sell one share at 610,000 yen (just over $5,000 U.S.), but the Tokyo Stock Exchange processed the trade, even though the price was clearly wrong.
This happened, according to the Daily Mail, “despite major banks and financial institutions pouring millions of pounds into tightening up their computer systems to prevent trades being made in error.” The kind of error being referred to here recently has been dubbed “fat finger syndrome,” apparently because it arises out of data input that is mistyped by bumbling human operators.
But let’s think about this. Clearly this is not a case of some harried data clerk whose engorged, greasy finger slipped off the 1 key and landed on 2. Obviously, the inputter put numbers in the wrong fields entirely (reversing price and number of shares), which might lead many of us to call this a case of “fat head syndrome.”
It’s very interesting, however, that although we lay the blame on a flawed human being, those involved in this incident seem to think that the solution lies in having better computer systems, as opposed to more alert human operators.
At one time, it was common in computing circles to point out proudly that “computers don’t make mistakes,” and that is true, assuming the human beings who program them don’t make any mistakes. But there are human mistakes aplenty in programming and software development. If you don’t believe it, ask yourself why you have to download software patches continually from the largest–and presumably most diligent–software companies, or why some software refuses to work with other applications without some prodding or reprogramming from (gasp!) humans.
And there is the crux of the matter. Mistakes, despite the understandable assumption they are anomalies, actually are the norm in the world of computing. The reasons for this are economic as much as anything else. Most software companies–at least off the record–will admit that they could provide products that are closer to being bug-free, but they would add that their development costs would be so high as to render the products unaffordable for many buyers.