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I suppose in hindsight my example doesn't look as disturbing as it's meant to. :)

It's hard to show concise examples that truly show how this little bit of error eventually compounds and destabilizes a calculation.

I think he is referring to the fact that the result should be around 0.8999, not 8.9999.

It looks plenty disturbing to me. I don't even think it should be qualified as a 'precision problem' it's more like a 'total failure'.