The lead article in today’s New York Times, “Origin of Scare on Wall Street Eludes Officials,” describes the inability of market analysts and federal regulators to discover the exact reason for the Dow’s 1,000-point decline on Thursday. The original explanation of an entry error, someone typing a billion dollars instead of a million, seems to be incorrect.

Well, it’s not very reassuring to know that there’s still a weak point in the market structure that can cause a worldwide financial panic. The current theory states that the slide may have been caused by the interrelationship between various markets and the different rules they have about when to stop trading or change procedures in the face of major declines. Electronic automated trading also remains as another possible reason.

Apparently, according to the article, today’s financial markets have become increasingly complex and have broken up into four different sectors: registered exchanges (63.8%), electronic communication networks (ECNs) (10.8%), dark pools (7.9%) and trading inside broker-dealers (17.5%).  The last two hide pricing information from the public until their trades are completed.

Meanwhile, the head of the New York Stock Exchange and Nasdaq have broken into a public feud with each other regarding their differing approachs about when to stop trading. Needless to say, all this is not very reassuring to the individual investor.

Let’s hope they figure it out sometime soon.

The lead article in today’s New York Times, titled “Dow Falls 1,000, Then Rebounds, Shaking Market,” describes a crazy day on Wall Street when the index fell dramatically then rebounded just as quickly. Part of the error, though the exact cause is still unknown, seems to have been traced to a mistyped sell order for a billion instead of a million. This cascaded into automated trading systems and led to a large sell off.

However, the index did finally close down 300 points or about 3 percent. And that was based on real worries regarding the situation in Greece, a country Germany will be reluctantly bailing out today if their legislature approves it. Rioting by Greeks in the face of austerity measures didn’t help the situation either.

At one point during the day, described as resembling the Twilight Zone by one trader, blue-chip stocks such as Procter & Gamble and Accenture fell by as much as 90 percent. Timothy Geithner, the Fed and European Central Banks held emergency conference calls.

All this economic lunacy just heightens the need and immediacy of financial regulation. While the markets are widely acknowledged as superior to the government in setting prices and controlling general economic activity, the article concludes by noting their need for “adult supervision.”

Hopefully, today’s trading will be less frenetic, and the factors leading to these wild gyrations will be better understood, and prevented.

The lead article in today’s New York Times is titled, “Madoff, Apologizing, Is Given 150 Years.” It describes the Ponzi scheme operated by Bernie Madoff and the reaction to his sentence as it was handed down yesterday by Judge Denny Chin.

Mr. Madoff attributed pride to his downfall, yet it was even more striking, according to the article, that noone testified about any good deeds he had done. The judge himself described the crimes as “evil,” and Bernie Madoff was labelled as a monster. A crowd waited to accost him outside the courtroom but were denied the opportunity as he was whisked in and out through another entrance.

In my opinion, Bernie Madoff has come to typify an era of Wall Street excess and greed, and the scope of his fraud and deception is, indeed, breathtaking. To lose your life’s savings, for even one person, causes indescribable pain, and that feeling was multiplied manyfold in this scandal.

But does Bernie Madoff really represent evil incarnate? Or is it a failure of the system that resulted in the steady expansion of his scheme? I’m unsure. I hate to demonize anyone, and his sins were economic ones compared to the genocides that occur all too frequently around the world.

I think we should be satisfied that justice was served, and try to move on from this sordid matter.

The lead story in The New York Times today was titled, “Fed Will Inject $1 Trillion More to Aid Economy. “  The Fed will accomplish this by printing the extra money and buying treasury bonds and mortgage securities.

According to the article, the fed’s decision doubled all of its measures from last year. It was designed to  lower interest rates for loans and thus encourage more economic activity.

Wall Street seemed to approve of the move by gaining over 90 points. But to me, it represents just one more indication that things aren’t going very well. One reason for the Fed’s move was that it could no longer lower its own interest rates to spark activity as the rates have been lowered so many times already, they’re hovering near zero.

And it also gives an indication that the other methods we’re trying aren’t working very well either, otherwise such a drastic action would be avoided, especially by the ultra-conservative Fed.

The whole situation reminds me of a sand castle. Sure, you can build some walls around the castle and hold off the tide, but it’s only a temporary measure. Eventually, the tide will break through the walls, and the castle will be doomed.

In the same way, the U.S. economy is too large to be affected by our fiscal and monetary actions, and the size of our problems will overwhelm even our boldest solutions. The tide will come in and hopefully, it will eventually go out again.

Today’s lead story in The New York Times was titled, “Madoff will Plead Guilty; Faces Life for Vast Swindle.” It describes additional details about the scandal and notes that Madoff could face a prison sentence up to 150 years, effectively life.

Bernie Madoff seems to represent all that’s bad with Wall Street and the culture of greed. But, in a perverse sort of way, he may cause a lot of good things to occur.

His fraud, now estimated at $65 billion, is so mind boggling that it may result in much stricter regulation of Wall Street, and protection of innocent investors, than would have occurred otherwise. Oh sure, we can be shocked at the size of bonuses provided by financial institutions, but these represent the systemic bias of our system and unfettered capitalism itself.

Madoff’s scandal suggests a much more harmful form of corruption because it goes beyond self-aggrandizement and inflicts life-altering suffering on innocent victims. The article in The Times notes, as of the end of November, there were 4,800 client accounts in Mr. Madoff’s roster. And also included were$10 million from 35 labor union pension plans.

The way Mr. Madoff was able to compound his deceit and rise to the top of the Wall Street elite suggests a more inherent corruption of the system than just the profit motive. As far back as 1989, Mr. Madoff handled more than five percent of the volume in the New York Stock Exchange and was ranked among the highest-paid people on Wall Street by Financial World magazine.

Mr. Madoff, by getting caught, may have done far more good than he ever intended.

Today’s lead story in The New York Times was titled, “Slump Humbling Blue-Chip Stocks, Once Dow’s Pride.” Some of the stocks listed at alarmingly low levels, as listed on the chart on page 16, are A.I.G. ($0.35), Citigroup ($1.02), General Motors ($1.86), Bank of America ($3.17) and General Electric ($6.66).

It strikes me that there’s a physical limit as to how much the federal government can support all these firms. It’s like the boy with a finger in the dyke; eventually, the forces of nature will take over.

Also, the approved funds will run out, and it will be very difficult to get Congress to approve an endless series of bailouts. Especially in the Senate, the Republicans will hang tough as a matter of ideology.

In the Times story, one expert said, “It borders on unbelievable.” But I don’t think so. When you keep increasing the federal debt, when consumers are spending more than they save, when credit cards are used to prop up the economy with increasing numbers of default, you don’t even need to anticipate a housing crisis to realize that collapse is on its way, if not imminent.

The stock prices are so bad that the New York State Stock Exchange had to suspend its minimum $1 per share requirement to prevent a series of delistings.

Where do we go from here? The most honest answer is that nobody knows. From what I’ve read, the rest of 2009 will be a lost year with the earliest possibility for growth in 2010.