Jim Cramer, Erin Burnett Freak Out As Dow Plunges 900 Points, Then Rebounds (VIDEO)

***UPDATED BELOW***

If you were freaking out over today's almost instantaneous plunge of 900 points on the Dow Jones and then equally fast and unexpected rebound, don't feel too bad because you were not alone. Check out this clip of CNBC's Jim Cramer and Erin Burnett going nuts as they try to figure out what just happened.

As Clusterstock said, it was "the most exciting moment in CNBC history."

WATCH:

***UPDATE*** As the sell off occurred, computer programs designed to automatically unload stock once the price hits a certain point likely exacerbated the process, causing the Dow to plunge so quickly. The sell off began over renewed fears of fallout from the Greek credit crisis.

***UPDATE*** CNBC reports that a trading error at a major firm is being blamed for the massive sell off today:

A possible culprit for the drop was a trader error in which someone entered a "b" for billion instead of an "m" for million in a trade. Multiple sources confirmed the report to CNBC and CNBC.com

***UPDATE*** The Economist is skeptical of the trader error explanation:

It's not clear what happened, exactly, but it looks as though computer trading strategies, rather than market glitches, may have exacerbated the stunning decline and reversal.

Comments

[GlobalOne]

03:37 AM on 05/11/2010

can these people be more annoying? dont they have ears?

[Benjo333]

12:07 PM on 05/09/2010

I would say it was a crazy 15 minutes...I thought they held it together pretty well frankly.

[fishnetdiver]

03:22 AM on 05/09/2010

Skynet: 1
Humans: 0

...so it begins...

[capitaldysfunction]

01:59 AM on 05/09/2010

My favorite video Jim Cramer quote post the end-of-the-Bush-administration stock market disaster: the Republicans were wrong...the only one right was Karl Marx.

[Keith Deines]

05:07 PM on 05/08/2010

lmao! I was watching Cramer & Erin on CNBC when this happened.....nothing like the glee of short sellers smashing the value of everyday peoples' investments into worthless oblivion.

As a well versed "CraCanadian" home gamer, buying stocks is not betting on horse races, that requires money, careful thought of which horse is best trained, best prepared and best in breed.
Wall Street is a casino...nothing more...nothing less

Moral of the story? The biggest ruse here is the Wall Street sales pitch(bare faced lie) to hard working everyday people that the path to a successful retirement(enable short sellers to steal their money) is to invest (roll the dice) their money in Wall Street.

Let's see if Merkel & Sarkozy launch their own version of financial "Shock & Awe" through the Euro Central Bank this weekend...Dow 8500 for the bears might be just a fleeting hope ;-)
Long live Jim Cramer!

[chindit]

03:06 AM on 05/08/2010

The most important thing anyone should take away from this 1000 point collapse is that THERE ARE NO BIDS UNDER THIS MARKET. Everyone who wants to be long is long, and save for the small money that trickles each in week in 401K contributions, there is nobody left to buy. The algo's who lined up on the sell side on Thursday laid bare the myth that this is a bull market.

If you are a PM or pension manager, be warned. The liquidity is not there if you need to exit. Commercial real estate or South Florida condos are probably more liquid than the stock market.

Given how computer-HFT driven the market now is---all using the same algo---it is not going out on a limb to say we could have a fifty percent down week.

[jalowe1957]

02:37 AM on 05/08/2010

Had the market dropped even further, Jim Cramer probably would have jumped out a window to his death.

[PragmaticStatistic]

08:50 PM on 05/08/2010

I wonder whether Goldman Sachs had a derivative betting that the market would crash a 1,000 points in a single day?

[SilasDogood]

05:24 PM on 05/07/2010

Is there a part 2? I didn't see them freaking out.

[swg1001]

05:09 PM on 05/07/2010

Many people lost a lot of money and a few people made a lot of money. If you think this is a mistake, I'd like to have some of what you are smoking.

[StopMakingSense2]

03:58 PM on 05/07/2010

If you have a Frankenstein financial system it's just a matter of time before it goes after it's masters.

[AncientIsraeli]

03:52 PM on 05/07/2010

Why anyone would take Jim Cramer seriously is a wonder!
The guy is your average Wall Street crook playing with other people's money, and he is not at all a good speculator.
I fired my broker and started managing my own.
Myself managed ROI now beats Cramer and those other Wall stret crooks by over 200%/annual, and it wasn't at all hard to do.

[mrcontinental]

09:37 AM on 05/09/2010

Taking control of your own financial destiny feels great doesn't it? And it's not as difficult as the crooks try to make it out to be. Great job!

[Golfer59]

03:52 PM on 05/07/2010

I never watch these folks on CNBC. Why you wonder? Because they're all tools of Wall Street!!! Nothing more, nothing less!!!

[BobSF94117]

03:27 PM on 05/07/2010

It's interesting that none of these guys considered the possibility is was a mistake for a while.

They weren't "freaking out". They were arguing and discussing strategy and opportunity.

Anybody who snagged those low prices doesn't get to keep them, right? They unwind all the buy/sells, no?

[PS9]

06:18 PM on 05/08/2010

Actually Cramer immediately said it was a mistake.

[LREKing]

03:12 PM on 05/07/2010

If it is true that the whole mess was the result of a typo, then automated trading needs to be rethought from the ground up. We were worryied about machines causing WW3, but who ever thought they'd have the power to destroy the world economy?

Also, the nimrod responsible should be named, and then publicly flayed.

[paradoja]

02:48 PM on 05/07/2010

seems like the market dived, somebody bought up quick cheap shares of powerful companies, the brought the market back up almost to were it was. I mean p