Congratulations! You get a free extra second today. How are you going to spend it? I'm kidding, of course. You won't even notice it! But to investors, the leap second is no joke.
Now, I know what you're thinking: "What in the world is a leap second?" It works exactly like leap year, only applied in seconds, not 24 hours.
You see, the Earth's rotation is slowing down and world clocks aren't. To make up for this small difference, scientists have added one second to today. It's not uncommon either. It's been done 25 times since 1972, with the most recent addition in 2012.
So what's the big deal? Why are investors a freaking out about a leap second? They're terrified of the potential consequences. This year, the change leap second is slated for 8 p.m. in New York, which is also the same time markets open in Asia. So, the fear is that when clocks go from 11:59:59 to 11:59:60 instead of straight to midnight, the systems will freak out and cause a meltdown. Think of it as Y2K: The Next Generation.
A lot happens in one second on Wall Street; about $4.6 million in stocks are traded in one second all day, around the entire globe, so there's plenty to worry about there. Geoff Chester, public affairs officer for the U.S. Naval Observatory in Washington told Bloomberg Business that 10% "large-scale computer networks will encounter hiccups due to the leap second."
While it's a serious problem, it's totally manageable. Google and Amazon used a method called "leap smear" in the past that distributed fractions of the extra second throughout the day.
What do you think? Will one extra second cause the market to crash? Or is it just another silly thing not to worry about? Let me know by posting in the comments below.