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BATS out of hell

Chairman of troubled stock exchange stripped of title, but stays on as CEO.

Following on from its disastrous flash-crash on Friday, the chairman of the BATS stock exchange, Joe Ratterman, has been stripped of his title. The exchange saw the value of its own listing plummeting from from $16 to $0.04 in just 900 milliseconds on the day of its initial public offering (IPO), due to a "serious technical failure" which also affected every other stock beginning with A or B on the exchange (including Apple, stock code AAPL).

As well as strip him of the chairman role, however, the BATS board released a statement defending Ratterman and allowing him to keep the title of CEO, saying:

Joe continues to do a tremendous job as CEO of BATS, leading an organization which now operates the third-largest stock exchange in the U.S., Europe’s largest stock market and a growing U.S. options exchange. We fully support his leadership, vision and strategic direction as BATS continues to enhance competition and foster innovation in markets worldwide.

Some board members lost a great deal from the failure of the exchange; Lehman Brothers was once BATS' largest shareholder, and their creditors were hoping to make $48m from the IPO. If they'd sold a second too late, that would have fallen to just $120,000.

Meanwhile, the investigation into what exactly happened continues, both in official channels and online. Zerohedge makes a pretty strong allegation:

What happened is that malicious, 100% intentional Nasdaq algorithm purposefully brought BATS stock to a price of 0.00 within 900 millisecond of the company's break for trading! This is open SkyNet warfare.

Zerohedge claim that, although the fallout that affected all of the other stocks on the exchange was indeed accidental, the actual crash in value of BATS stock was done on purpose by an algorithm trading from within the Nasdaq network. It all gets a bit conspiracy-theorist from there, but it is true that for the algorithm to have done what it did by accident would be a remarkeable coincidence indeed.

Whether it was a software error or a malicious automatic trader, though, the wider outcome remains the same; the image of machine trading is at an all-time low, and any time something like this happens, it pushes it lower still.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.