>How about an explanation of what's going on with NYSE/Archipelago/Goldman
>Sachs, Doug? --CGE
I confess I haven't been following it that closely, but the fundamental issue is the obsolescence of the NYSE trading structure. Now, much of the order flow through the exchange goes through "specialists," who are brokers who make markets in specific stocks. They keep the books on orders to buy and sell. Being a specialist has been a license to print money; not only do they make money on the trade, they get a very good sense of what the market looks like, and can trade accordingly. Most human-centered trading systems have been replaced with purely computerized trading, which match buyers and sellers without human intervention. The NYSE is one of the last remaining outposts of the old order. Specialists and floor traders add a layer of complexity and expense that's not needed. (In practice, the NYSE works pretty well; it kept trading during the 1987 crash when all the screen-based systems seized up.) So the question is, what next? The NYSE wanted to do a merger with Archipelago, an electronic trading system, and then do an IPO and become a public company - and Goldman was giving advice to just about everyone involved. (The NYSE boss, John Thain, is a former Goldman exec, too.) This provoked a rebellion from other WS hotshots, who also want a piece of the action. BIllionaire investor Kenneth Langone, a co-founder of Home Depot, launched a rival bid, and has some Wall Street bigwigs on his side. So now there's a big fight over what happens next. In any case, it's likely there's going to be some vacant space on the corner of Broad & Wall; it could all be replaced with a server farm in the Caymans.
Doug