Among the ‘business blunders’ that ‘The World of Business’ of The Economist (www.vivagroupindia.com) lists is ‘fat-finger syndrome.’ It is a terrible affliction that affects those working in financial markets, the book states. In 2005, one learns that the problem, whereby hapless traders input incorrect information, hit Mizuho Securities.
“A cack-handed employee mistakenly typed a sell order for 610,000 shares at 1 yen in a firm called J-Com rather than one share for 610,000 yen. The Japanese financial group managed to buy back many of the shares and overall the error is estimated to have cost the firm over 40 billion yen.”
Another example in the book is from 2002; a trader at Eurex in London wanted to sell one futures contract when the DAX, Germany’s leading share index, hit 5,180. “Unfortunately, he sold 5,180 contracts and the market plummeted. The exchange later cancelled the errant trades.” Similarly, a $4 billion sell order, instead of $4 million, by a trader at Bear Stearns was blamed for a 100-point drop of the Dow.
Island sale
The case of Manhattan Island is a blunder of a different kind. In 1626 the Lenape Indians sold Manhattan Island to Peter Minuit, director-general of New Netherlands Colony, a Dutch settlement, for goods valued at 60 Dutch guilders, or $24, the authors narrate.
“Minuit was also involved in the purchase of Staten Island in return for kettles, cloth, wampum and tools. These Indian chiefs did at least do better than thousands of others who got nothing for land later appropriated in America.”
By 1800, however, valuations seem to have got far better. When, for instance, in 1803 the US purchased from France the Louisiana Territory, more than 2 million sq km of land extending from the Mississippi River to the Rocky Mountains, the price was 60 million francs, about $15 million.
In comparison, the 1886 transaction of Sors Hariezon, a gold prospector from Witwatersrand in the Transvaal who sold his South African gold claim for $20., reminds one of the Minuit-type deals. “Over the next 100 years, mines sunk on or near his claim produced over 1,000 tonnes of gold a year, 70 per cent of the supply of the precious metal in the West.”
Engagingly informative read.
**
BookPeek.blogspot.com