Sandy, the NYSE or the Wussification of America
- Posted by Greg Harmon
- on October 29th, 2012
I feel for everyone in the path of hurricane Sandy. From those that lost work and are struggling to make ends meet to those that are stuck in their $5 million apartments downtown because the lobby is underwater. Truly. But I cannot accept the thought that the America I grew up in has become so wussified that the stock exchanges are afraid to use their disaster recovery plans and keep trading going electronically. Back in 1999 I was responsible for the Y2K plan for my business within a large bank. Even then the amount of planning and redundant systems, equipment and investment was massive to be able to be up and running for anything. September 11, 2001, identified some flaws, especially at the major banks (The Bank of NY for example had its back up facility across the street) who ended up setting up facilities in different states. Every major investment bank has traders with remote access and facilities and office across the country. So why did we not open Monday? I actually heard Duncan Neiderauer, CEO of the NYSE, tell CNBC that he was comfortable closing because he did not want to have his first live production test of Arca carrying the full load of trading to happen Monday. Serious questions come to mind on that one. Would it truly be the first live test? That in itself is scary. I don’t believe it. But go further, why not try it and if it does not work after 10, 30, 60 minutes cancel the trades if it does not work. That is what would have happened in the America I grew up in. We have mini events like this weekly. Wussies. Many, many investors placed their faith in a system that would be rock solid. Open daily. Did the retail or institutional investor get consulted about the closure or just the major investment banks? Don’t get me wrong, I am not a proponent of asking people to move into harms way. but I was in San Diego Thursday when they reported on the local television there that the Hurricane was coming. Did nobody take action? Were all the senior executives at all these firms asleep at the wheel, or are they always asleep. There was plenty of time to fly traders to Chicago, Dallas, Los Angeles, or where ever to deal with the circumstances. I miss the America I grew up in where people wanted to try hard, to succeed, to make things happen even after someone told them it could not be done. Wussification. I am just sad.
Good luck to all of you that are bearing the brunt of this storm. Here in Cleveland we are getting hammered with rain and sustained winds at 40 mph with gusts to 65 mph but it does not compare to what you are enduring. Be safe.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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