Our buddy Rich Brueckner over at insideHPC broke some news this week when he published a story about new conference and travel spending restrictions that might radically scale back U.S. government agency participation in HPC industry events like the upcoming SC12 conference in Salt Lake City this November. The new strictures are almost certainly due to adverse publicity and bureaucratic fallout from the 2010 Las Vegas junket enjoyed by employees of the GSA (U.S. General Services Administration).

The $822,000 spent on that Las Vegas convention has been dubbed ‘lavish’, ‘outrageous’, and ‘completely over the top’ by news reports, politicians, and pundits. (But was called ‘about right’ by Elton John, according to rumors.)

Of course, when you’re talking about 300 career bureaucrats looking to celebrate the joys of bureaucracy on someone else’s dime, what’s too much?

I recently wrote about how a bad round of software testing cost Wall Street trading firm Knight Capital an estimated $440 million – enough to almost put the company out of business. In that article, I speculated that Knight might be bailed out if the SEC allowed them to unwind the trades, basically taking a mulligan on the 45-minute debacle. Turns out that ain’t gonna happen. (Insert mea culpa here: I also mistakenly reversed the terms ‘bid’ and ‘ask’ in that story. Which is shameful, given that I have both graduate and undergraduate degrees in finance. I am a constant disappointment to myself and everyone around me. That said, on with the story.)

Knight was left squirming on the hook by US regulators and subsequently forced to find money to cover the losses from third parties. In return for floating Knight $400 million, six other Wall Street firms will be paid a 2% preferred stock dividend and, if they like, be able to convert those preferred shares into enough common stock to own 75% of the company – a pretty sweet deal for a company that was a solid market player before last Wednesday.

Tyler Durden’s blog posts at Zerohedge have been both fast and solid on this story. Here he posts some of the highlights from an interview with Knight CEO Tom Joyce. One of the quotes from Joyce: “We have to do a better job on our testing environment.” Yeah, I think I’d make that a priority, or at least move it farther up the list. It’s an understatement of such magnitude that I’m at a loss to come up with an apt comparison. Maybe if Napoleon had said, “We need to do a better job of scouting out our enemies” after Waterloo? But I’m drawing a blank right now.

So what happened IT-wise with Knight Capital?

Knight Capital, a firm that specializes in executing trades for retail brokers, took $440 million in cash losses Wednesday due to a faulty test of new trading software. In headlines it’s being called a trading “glitch,” which isn’t nearly as accurate as the term I’d use: “f**king disaster.” The broad outline of the story is here and more colorful, bloody details are here.

Briefly, here’s what happened: Knight Capital’s worst day in IT started Wednesday morning with a test run of their new trading software. An old pal of mine who’s following the story closely (and is also deep in both IT and trading) told me that the company set up the software to work with only a few stocks. They also set the buy/sell points well outside where the markets were currently trading to ensure that nothing would actually execute.

But somehow – and this will probably the be the subject of several lawsuits, books, and maybe even a Broadway musical – the software didn’t behave as expected. It went out and did what it was designed to do: execute lots and lots of trades very, very quickly.

As part of a look back at ISC'12, the guys talk about the Student Cluster Challenge. Dan proposes a joint ISC/Supercomputing challenge so we can crown a world student cluster champion - and award a massive trophy. The hosts discuss how the cluster challenge makes participating students a hot commodity on the job market. And... this episode includes gongs.

Check the Radio Free HPC website for new episodes and more great content from Rich Brueckner of insideHPC, Henry Newman of Instrumental, Inc., and GCG's Dan Olds.

A conversation with Jack Dongarra (of Top500 list fame) at ISC'12 is the inspiration for a spirited discussion of whether the venerable LINPACK benchmark has outlived its usefulness. Dan accuses Henry of cursing the darkness; then they talk about what is, and isn't, a good benchmark.

Check the Radio Free HPC website for new episodes and more great content from Rich Brueckner of insideHPC, Henry Newman of Instrumental, Inc., and GCG's Dan Olds.