What's it mean for the city is what I am getting at.
Steve
----- Original Message ----- From: "Doug Henwood" <dhenwood at panix.com> To: <lbo-talk at lbo-talk.org> Sent: Thursday, April 28, 2005 2:27 PM Subject: Re: [lbo-talk] Wall Street
> C. G. Estabrook wrote:
>
>>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
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