Posted on 11/01/2012 7:56:34 AM PDT by SeekAndFind
Closing the nation’s big stock exchanges for two days thanks to Sandy isn’t the end of the world — indeed, yesterday’s reopening of trading was largely uneventful, with the Dow Jones Industrial Average closing largely unchanged with normal volume.
But what if something worse had hit, a terror attack or some other disaster that meant a more prolonged delay of trading on a major US market?
The answer: It won’t be pretty. Capitalism doesn’t quite cease without the stock markets in operation, but it comes pretty damn close.
And it could happen, because Sandy just exposed the sad fact that, more than a decade after the market came to a grinding halt after 9/11, the people who run our financial system have few clues and almost no plan to keep that system open and ready for business in the event of an emergency.
Yes, they’ll tell you they’ve got all sorts of emergency procedures to keep things running; a Goldman Sachs spokesman talked my ear off yesterday explaining how prepared the bank is for a disaster like Sandy. Yet he couldn’t explain exactly what the plan is, or why it wasn’t implemented for Sandy.
Goldman, I reminded him, has offices all over the country and even in London, so couldn’t it have set up shop temporarily in a city out of harm’s way? I’m still waiting for his answer, and for answers from some other big banks — and from maybe the biggest culprits here, the leaders of the New York Stock Exchange.
On its surface, the Big Board made a compelling argument on how closing down was prudent, given the massive destruction that Sandy might (and did) wreak. Why endanger everyone from traders to back-office folks, just so a few shares of IBM could exchange hands? Fair enough.
(Excerpt) Read more at nypost.com ...
Sure those greedy capitalist in the NYSE were woefully unprepared, but ask yourself: What if more attention had been paid to preparing and preventing the infrastructure from being destroyed, instead of mandating the size of Big Gulps, if maybe they’d be better off?
Further, banks connect to wall street because it is a trading center. They need very close connections to each other in order to do their fast trading programs.
If this nation wants to have a secondary trading site, it is technically possible to do so. Perhaps a west coast trading center. However, the trading day would need to change in order to allow a smooth processing of the markets.
I would propose a 6 hr trading day on the East cost, a one hour trade stoppage to allow settlement of accounts and then start another 6 hr trading session out on the west coast. But such a change would require agreement across the members of a stock exchange. And getting agreement across the members would be very difficult.
If they ever demonstrate that the NYSE can be run OUTSIDE of NYC, someone will (hopefully) get the idea to move the whole lot to a nice climate (meteorological, business regulations and tax burden), lower cost of living, no need for taxis, traffic jams, etc.
Leave NYC to Broadway shows and the fashion industry.
If a company moved their corporate HQ to an area with lower cost of living, overhead could drop. Say “flyover country, Red State America...
(sigh...it will never happen. It would take too much common sense to apply the same cost cutting measures to upper management that they are so fond of for the folks in production. Might even make us competitive globally.
Just move it across the river to Brooklyn.
Who is in charge of and responsible for this infrastructure?
The big problem is that as much high tech stuff as their is surrounding the stock market at the core is still a bunch of guys in a room yelling at each other. It’s a hard situation to come up with a good disaster recovery situation for. They need those guys (or guys with the same licenses) and a whole lot of communication gear. And because you never know how large a space the disaster will cover you can’t really plan ahead of time where to put it. In the end the global market offers the best recovery plan, a truly significant percentage of our stocks are traded globally and so shutting down NY doesn’t effect much. Everybody not traded globally will just have to wait.
The NYSE has a huge center in Mahwah, NJ.
Bloomberg is the mayor and if he can decide what size soft drink I can have, or how many people must be in a car driving into the city, he should then have authority to tell his underlings to pile sandbags so the tunnels and subways aren't flooded. He has been more concerned with controlling people than doing his real job.
Do you honestly think that flooding could have been prevented with sandbags and they actually thought they needed them or even had enough time to procure, fill and place all those sandbags? Should the govt be responsible for private businesses preparations for a hurricane?
Now the shoe is on the other foot, so wear it!
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