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Strategies & Market Trends : The Final Frontier - Online Remote Trading
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To: TFF who started this subject2/18/2004 10:32:31 AM
From: TFF   of 12617
 
.Bringing Down the Temple
Investors lose billions of dollars a year to the middlemen at the New York Stock Exchange. At long last, they are demanding a change.
By Shawn Tully

For 132 years the New York Stock Exchange has extolled its specialist system as the keystone of its stature as the world's greatest marketplace for trading stocks. The folks in the black and colored jackets who deftly referee the melee of frantic buyers and sellers on the exchange floor are as much a symbol of unfettered capitalism as the NYSE's monumental Greco-Roman façade. What's not to like about a bunch of regular blue-collar guys who, when they depart the temple at Wall and Broad each evening, meet for beers at Harry's bar?

But suddenly the specialists' role as capitalism's noble traffic cops is under siege, and the attack threatens to pull down the temple itself. SEC chairman William Donaldson and congressional lawmakers are "assessing" whether the NYSE's rules allow human market makers to impose many billions of dollars a year in extra costs on investors—first, by grabbing markups for themselves at customers' expense; second, by forcing them to pay excessive commissions to the floor brokers who work for Wall Street firms; and ultimately by skewing the stock prices that investors pay. What has finally pushed regulators to the brink of action, after years of ignoring such complaints, is the swelling rage of the NYSE's most powerful customers—institutional traders like mutual funds and state pension funds.
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