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The Tiny Mistake:
Back in 2007, a Kmart in Wauwatosa, Wisconsin, decided to run a promotion: apply for a store credit card, get a free $10 gift card. It's a pretty straightforward tactic, with a pretty straightforward result -- lure a few credit-starved store patrons in, latch them firmly onto the corporate credit teat, and ... profit!
"A convertible sleigh crib for only $219.99! Buy now, pay later, and then make the baby!"
There's just one small but very important detail that keeps this from turning into a huge merchandise giveaway: They have to make sure that the people receiving said credit can, you know, pay it back. Well, apparently no one informed the computer processing the applications of that minor detail -- it started tossing up to $4,000 in credit around all willy-nilly, approving any- and everyone's application regardless of the amount of financial fuckery on their credit report.
So what happens when you take a Kmart in Wisconsin and stuff it full of a crowd of people who see a guaranteed line of store credit as a flashing neon "FREE MONEY" sign?
A riot. That's what happens: a freaking Kmart riot.
As it turns out, people with less than desirable credit histories apparently have some sort of underground "free money" railroad, and also possibly a "free money" Batphone. Word spread like a Wisconsin wildfire, and before long the store was swarming with people literally fighting to get to the front of the line and get them some totally "free" Kmart goodness.
The store ran out of credit applications. Dealers showed up with reams of them snagged from other Kmarts in the area and started selling them in the parking lot for 20 bucks a pop. And it didn't take long for this crowd to turn ugly: It all started when two young men decided to hulk out and fling a Kmart employee through a glass display case, and it was all downhill from there. That one fight snowballed and transformed the normally peaceful Kmart (Black Friday excepted) into a straight-up bar brawl from an old Western movie, except with fewer cowboys and more Blue Light Special-obsessed housewives. As one eyewitness joyfully reported, "It was a nice brawl. It came from inside to outside. If you go up there, you'll see hair, earrings, all pulled out on the ground."
Until employees spit-shine them and hang them in Aisle 32.
Police responded in full-on riot gear and dealt every last shopper a good ol' tear gas/Taser combo (we're assuming), and once the smoke cleared, the store's management promptly hung a sign on the door saying that it was no longer processing credit applications. Possibly ever.
But at least Kmart could rest easy knowing that not that much money was at stake. When it comes to financial glitches, shit can get real in a hurry ...
The Tiny Mistake:
For nearly 20 years, the Knight Capital Group was one of the largest "market makers" in the stock market, at one point being responsible for 11 percent of all trading in American stocks. Then, one Wednesday in August of 2012, Knight booted up their trading computers and the freshly "upgraded" software started buying and immediately reselling shares of over a hundred stocks, artificially pumping up their value with each exchange.
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"It becomes self-aware at 2:14 a.m. Eastern time, August 29 ... It becomes a yuppie douche the next day."
Luckily, the automated shenanigans only went on for about 45 minutes before Knight discovered and put a stop to them. They were stuck with selling all those overinflated stocks they had unknowingly snatched up back into the market at a much lower value -- but how much damage could be done in 45 measly minutes, really?
Nearly half a billion dollars, or 10 friggin' million bucks per minute, plus untold numbers of businessmen's boxers ruined by untold amounts of pee.
To put that in perspective, if you had that much money, you would lose all perspective.
That's how much Knight Capital lost during one 45-minute-long computer glitch. When all was said and done, they'd lost a total of $440 million, more than 1.5 times their revenue for the entire second quarter of the year. Months of work was rendered pointless by a single computer system with the attention span of a 4-year-old standing in an infinite candy store with limitless access to Grandma's coin purse.
Now, you've probably noticed that we've been referring to the Knight Capital Group in the past tense, and there's a good reason for that: Not many companies can survive a nearly half-billion-dollar loss, and Knight was no exception. At the end of 2012, they were acquired by rival trading firm Getco, who hopefully bailed them out with better-behaving computer systems, in addition to the snappier name.
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"Getco is a wholly owned subsidiary of Petco. Your investment is safe."
Still, as insane as $10 million per minute and the financial ruin of a major market maker sounds, at least the glitch didn't nearly crash the entire stock market or something ...
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The Tiny Mistake:
In February of 2007, on a blustery afternoon of record trading on the New York Stock Exchange, the computer that controls the incomprehensible voodoo black magic of calculations that is the Dow Jones Industrial Average started chugging down to a snail-like crawl. This went on for about an hour, during which the computer eventually began running so slowly that it wasn't updating to show any trades as they were occurring.
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Some of the older traders had installed some "really nice" toolbars.
But unlike you when you've only got five minutes of your lunch break left and your computer's creeping too damn slowly to load that boxing cat video that your friend just shared on Facebook ("It's a cat! And it's boxing! And you won't let me watch it?! Burn in hell, you electronic torture machine!"), this wasn't a big deal. After all, we're talking about a single goddamn computer in what must be the massive network that makes the stock market tick, and it took Dow Jones literally seconds to switch to a backup computer once the problem was discovered.
Well, much like how that kitty never stops boxing (never), trading on the stock market doesn't stop just because you can't see it happening. Winning the stock market requires keeping a vigilant eye on what stocks are doing at any given moment throughout the trading day, so for the entire hour that the computer was malfunctioning, scads of investors saw that the Dow was sitting entirely unchanged. Then, once the problem was discovered and the switch to the backup computer was flipped, the average suddenly updated to its correct value -- which, to all those investors who had been unblinkingly glued to that number, looked precisely like the Dow Jones Industrial Average had just damn nigh instantaneously dropped by 200 points. And, in case you don't happen to be a stock trading wiz, 200 points is an A-1 shit your khakis-level drop.
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Traders assumed terrorists must have struck. And, worse, our portfolios were in danger.
This whipped investors into a sellsellsell frenzy that "pretty much collapsed" the New York Stock Exchange and caused the Dow to drop by a total of 546 points -- all within the last couple hours of the day's trading. To put this in terms that a person not wearing a business suit and possessing no less than three mobile devices in belt holsters might understand: There was a stock market crash in 1987. During that crash, the Dow Jones Industrial Average dropped by 508 points. This mess, brought about by a single computer system running slowly for a single hour, caused a larger drop than that.
Luckily, trading closed for the day before the problem could get any worse, and the New York Stock Exchange immediately issued a release saying that they would be upgrading their computer systems. They probably added a third one or something, so we're sure there's virtually zero chance of a repeat occurrence.
Related Reading: Let's take our glitches to a creepy new level. Read about the terrifying Manimals of Red Dead Redemption. Hey, gaming history is often made by dumb mistakes. Laura Croft's infamous rack was all the result of an errant mouse click. Rather read about glitches that caused huge disasters? We've got more of those too.
For glitches that would actually be cool, check out If Real Life Had Video Game Glitches and Cheats.