Opinion: An Insane Day on Wall Street

(May 7) -- Let's start with the obvious.

Thursday's action on the New York Stock Exchange and all of the major stock exchanges was literally insane. For the Dow to drop by close to 1,000 points on no news, that is no new news, so to speak, was simply not based upon anything fundamental in the national or world economy. For Procter & Gamble to lose one-third of its value in 10 minutes is not sane. For Accenture to drop from the 40s to one cent is not sane.

There was some kind of massive trading problem with the electronics of the stock exchange. This is a catastrophe for people who were sold out on stop loss or panic selling while the market was at the bottom. This has to be sorted out, with the losers made whole by the stock exchange. It will be a massive job, but it must be done.

This is a snafu so monumental that if it's not made right, confidence will be rightly lost in the whole stock market system. I assume the Securities and Exchange Commission is all over this, and it had better be. I marvel that we have not heard from President Barack Obama about this disaster, which affects far more Americans than the tragic Gulf of Mexico oil spill.

Next, let's put on our sane hats about the eurozone. Yes, Greece is a mess. Yes, maybe so are Spain, Portugal and Ireland. But it is well within the power of the European Central Bank and the International Monetary Fund to bail them out. There is no reason at all for investors to lose their minds. Unless there is some immense, unfunded derivatives liability lurking out there, this will be a long, slow problem and not an immediate economic bloodbath. Unless something is hidden, nothing is on the horizon to sink the recovery or even slow it down.

Greece matters, as I wrote on these pages few days ago. It just does not matter much, and it certainly does not matter as much as the fact that our stock exchanges just don't work as well as an iPod. Or that talking heads on TV are talking nonsense.

Investors, take a deep breath. SEC, take a hard look. Someone needs a whupping.

Ben Stein is an economist, lawyer, actor, comedian, public speaker and university teacher, and he was a speechwriter for Presidents Richard Nixon and Gerald Ford. He has also written several books, the latest of which is "The Little Book of Bulletproof Investing," written with Phil DeMuth.

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