08/02/2012 07:46 am ET Updated Aug 02, 2012

Stock-Trading Robots Refuse To Open Pod Bay Doors: Seven And A Half Things To Know

Thing One: Pratfall Of The Machines: I think if I were running the biggest stock market in all the world, the best thing to do would be to put all trading in the hands of robots and then turn the trading dial on those robots all the way up to 11 and see what happens.

What, that doesn't sound like a good idea to you? Well, you must not love America, then, my friend, because that is how we do stock trading here in these United States. And it works just fine. Sure, occasionally things happen like yesterday, when the Hal 9000s at a New Jersey trading firm called Knight Capital appeared to cause insane price movements in about 150 stocks, including many that you probably own in your own horrifyingly small "retirement" account. Trading in six stocks, including the ironically named (and stupidly spelled) Wizzard Software, was so crazy that the New York Stock Exchange gave them a do-over for the whole day, canceling all their trades.

So of course now everyone is all angry with Knight, whose own shares plunged 33 percent yesterday. And that is deeply pleasing to the people over at Nasdaq, because Knight has been crying for weeks about how Nasdaq goofed up the Facebook IPO and cost Knight a bunch of money. How does it feel, Knight Capital, Nasdaq is wondering, how does it feel? Except what we should maybe be focused on is how our markets are hopelessly broken, and unless and until we fix them -- by putting a lid on how much damage these high-speed stock-trading robots can do, say -- we are going to continue to get incidents like this and like the Facebook IPO and like the Flash Crash in 2010. No wonder everybody hates stocks and nobody trusts markets. Maybe Bill Gross was right after all.

Thing Two: Dr. Do-Little: The Federal Reserve noted yesterday that the economy has slowed down a good bit and that unemployment is still painfully high and bravely decided... to do nothing. But it did promise that maybe it will do something in the future. So, feel free to pay your mortgage with that promise. Meanwhile, the market's hopes for stimulus have turned to Europe, where the European Central Bank is meeting this morning. ECB chief Mario Draghi has all but promised some action, so markets will be very, very angry if he doesn't deliver.

Thing Three: Nice Package: If you're a job creator like General Electric, you know how hard it is to get good people to sit on their asses and do nothing. So you probably won't be surprised at all to learn that GE is going to be paying its critically talented and important former vice chairman, John Krenicki, $89,000 per month -- per month! -- until 2022, just so he won't go do his awesome, mind-blowing vice-chairing for a competitor. The Wall Street Journal calls this an "unusual" arrangement, for some reason. Meanwhile, though Krenicki can't work for a GE competitor, he can go quietly toil away at a private-equity firm for some walking-around money, which is what he is going to do.

Thing Four: Another One Files For Bankruptcy: The hot new thing in municipal debt these days is filing for bankruptcy. The town of San Bernardino, California, just did it yesterday, making it the third California town to do so in the past two months, Reuters writes.

Thing Five: NBC You In Hell: Everybody is so mad at NBC because it didn't alter the space-time continuum to show live Olympic events that happened six hours ago. But it's OK because NBC may not lose money on the games as previously expected, the Wall Street Journal reports. London may not be so lucky, the Washington Post points out.

Thing Six: Managed-Care Comeback: In order to keep down health-care costs, insurance companies are bringing back the dreaded "managed care" model, in which they limit what kind of treatments patients can get, the Wall Street Journal writes: "Today's approaches are tweaked, but may feel familiar to many: Insurers are rolling out plans with more restricted choices of doctors and hospitals, and weighing new requirements for referrals before patients can see specialists."

Thing Seven: AIG Needs To Be Free: Big dumb insurance company AIG, which we bailed out during the crisis and still own most of, wants taxpayers out of its hair, gosh! It has a plan to buy back most of its stock from the government and run free, the Wall Street Journal reports: "Bringing the government's current 61% stake to below 50% would be a victory for AIG and its management team. But it could bring the additional headache of tough oversight from the Federal Reserve, which is expected to regulate the company when the U.S. is no longer a majority owner."

Thing Seven And One Half: Games Faces: We love the Olympics for the pageantry, the drama, the thrill of victory, the agony of defeat, all that crap. But mostly for the hilarious faces Olympic divers make. Almost as hilarious as the faces figure skaters make. Let the Photoshopping begin!

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Calendar Du Jour:

Economic Data:

8:30 a.m. ET: Initial Weekly Jobless Claims for 07/28

10:00 a.m. ET: Factory Orders for June

Corporate Earnings:





Heard On The Tweets:

@BCAppelbaum: My job would be more interesting if Bernanke, Draghi et al were about to swim laps. Or swing swords. Or race bikes.

@pdacosta: Bernanke to Draghi: it's all you man.

@JustinWolfers: Apart from persistent failures in fiscal and monetary policy, the US macroeconomy is in good hands.

@BetseyStevenson: I honestly don't know what the Fed is waiting for. All the data points in my 90% CI for Friday's jobs report call for Fed action.

@ReformedBroker: Hilsen-wrath (noun): Sudden furor at a Wall Street Journal reporter when leaked Fed action does not materialize

-- Calendar and tweets rounded up by Khadeeja Safdar.

And you can follow us on Twitter, too: @markgongloff and @byKhadeeja