THE TYPO TAILSPIN?…. Wall Street was having a pretty bad day yesterday, largely in response to the European debt crisis, when things took a striking turn for the worse. Around 2:45 p.m. (ET), the major indexes, all of a sudden, lost several hundred points for no apparent reason. And then, a few minutes later, they gained several hundred points right back.

It wasn’t long before Wall Street scuttlebutt started making the rounds: someone made a typo. A trader, rumor had it, had hit “b” (billion) when he meant to hit “m” (million). They are close to one another on a keyboard — causing a global panic could happen to anyone, right?

But was this actually what transpired? Could human error really be responsible for a brief market disaster? For the most part, yes.

Then, within a few minutes, the United States stock market appeared to be collapsing. Some of the decline was real, but another part of it was simply trading gone awry.

Temporary plunges in the price of Procter & Gamble and 3M, the former Minnesota Mining, cost the Dow about 300 points, and appeared to be the result of errors, not intentional sell orders. Similarly, Accenture, a large consulting firm, fell from more than $40 a share to one penny.

Apparently, the errors were identified, and the markets quickly recovered — to the extent that they had an awful day, rather than a ridiculously awful day.

But it’s not as if the financial markets would have been fine had the mistakes been avoided. The underlying reasons driving much of yesterday’s ugliness are more serious than a typo.

Combine one part nervous traders, one part Greek crisis and one part trader error. Stir in one part central bank complacency. Bring to boil. Panic. […]

Even though a substantial part of the worst plunge appeared to be linked to a trader error … prices had fallen around the world even before such mistakes began to happen.

It appears that investors are again growing more hesitant to own assets like stocks and bonds, particularly since many now cost far more than they did only a few months ago. Another sharp retrenchment by investors, consumers and businesses could threaten the current global recovery by choking off financing and new orders for companies.

The new monthly job numbers will be released in about a half-hour; the Bank of Japan pumped $22 billion into financial institutions to soothe markets; G7 finance ministers will chat again today; and later today, “leaders from the euro-area countries will meet in Brussels to sign off on their unprecedented support package for Greece and to discuss the situation.”

Should be an interesting day.

Steve Benen

Follow Steve on Twitter @stevebenen. Steve Benen is a producer at MSNBC's The Rachel Maddow Show. He was the principal contributor to the Washington Monthly's Political Animal blog from August 2008 until January 2012.