Fastest ever drop in global financial market baffles experts.

In 2010, the global economy was not in good health. Following the 2008 crash, the Eurozone was still in trouble, with Greece and Italy struggling in particular. The rest of the world feared contagion – even a little bad news had the potential to cause widespread economic panic.

This was the backdrop to the dramatic events of May 6 – an economic crash that happened so quickly that most people, even experienced market traders, missed it.

The key message here is: Fastest ever drop in global financial market baffles experts.

So, what exactly happened?

At 1:41 p.m. Central Standard Time, the S&P 500 index, which tracks 500 of the biggest US firms, dropped 5 percent in four minutes. The Dow Jones index tumbled along with it, falling more in five minutes than it had in its entire 114-year history. Individual shares plunged, too, creating stock charts that looked like sheer cliff faces. All across the world, from Shanghai to Frankfurt, the financial markets went into panic mode.

Then, the Chicago Mercantile Exchange, a global derivatives marketplace, had its automatic stop-logic function kick in, which stopped all trading for five seconds. When trading resumed, the markets miraculously began to climb again.

But in that 15-minute window, some very strange things had happened. Some shares collapsed to eye-popping levels – iShares Russell 1000 Value Index went from $50 to one ten-thousandth of a cent. On the other hand, shares in the tech giant Apple and the auctioneer Sotheby’s rose to $100,000 per share! The world had been turned upside down for a brief moment.

But these are all just abstract figures. What did this so-called “Flash Crash” actually mean for the people with money at stake? Well, many ordinary people all over the world lost out.

Take Mike McCarthy, an unemployed father of three from South Carolina. He had inherited a small stock portfolio when his mother had died the year before. As he watched the market slump, he panicked, then called up his broker and told her to start selling his holdings. Unfortunately for him, his order was executed just as the market collapsed. This cost him $17,000 – or the equivalent of eight months of his mortgage payment.

How had this sudden crash happened? At that moment, nobody knew.