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Scared By the Nasdaq Flash Freeze? Get Over It Says Fahmy

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For three long hours Thursday, roughly one-third of the U.S. stock market was offline, halted and untradeable, as the Nasdaq (NDAQ) toiled to repair another trading glitch - and its reputation - at the same time.

While exchange officials and markets regulators have insured investors once again that the markets are safe and orderly and functioning fine, the view on Main Street, of what USA Today has dubbed the flash freeze, is that this is just another blow to market confidence that's already in crisis.

And yet professionals like Joe Fahmy of Zor Capital argue that, in some ways, the trading halt was reassuring, in as much as the problem was identified, managed and resolved in an open and orderly fashion.

"I don't think it's a big deal," Fahmy says in the attached video, noting that the only ones who are upset are the traders. "Both individual traders and institutional traders hate the high frequency traders," he says, noting that whenever anything goes wrong they're eager to single them out for blame, whether they deserve it or not.

To be fair, as much as the so-called High Frequency Trading or "HFT" crowd is subject to increasing scrutiny and tighter regulation, Thursday's problem was not their fault. And even when the market finally re-opened, Fahmy says it was ''orderly and no big deal" and the HFT's were unable to exploit a tension-filled and unprecedented moment in stock market history.

For its part, the Nasdaq has been on a PR offensive in the wake of the drama, with CEO Robert Greifeld telling CNBC that he was ''deeply disappointed" the problem happened, but also "quite proud" of how it was handled.

"We aspire for perfection. We want to get to 100% up-time," Greifeld says, before qualifying his remarks with the realities and the technological complexities that are part of modern trading. "It's important to recognize that we have the ability to handle the situation properly when a problem arises, (but) we can't achieve perfection."

As for the long-term effect this latest calamity will have on the supposed fragile psyches of individual investors who have now lived through flash crashes, squirrel scorchings and the Facebook Foible, Fahmy says most probably didn't even know it happened.

"They say it effects Mom and Pop. I don't really think it does," Fahmy argues. "They're not in there actively trading and competing," he says, while admitting wide spread media coverage certainly won't help psychology.

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