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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (33901)	11/21/1999 2:37:00 PM
From: Vitas	Respond to of 99985

Harvey still banging Wall Street By J. Alex Tarquinio NEW YORK. 3:55 PM EST-Harvey Houtkin is mad as hell, and that's when he's being polite. The former professional trader first discovered that he could tap into the Nasdaq market directly for his private account ten years ago, pioneering the day trading phenomenon. Though Houtkin admits that the equity markets are much freer today--and he's not too bashful to take a fair share of the credit for that--he still sees a lot of room for improvement at the big brokerages, exchanges and regulatory agencies. "The system is totally corrupt," he remarked after speaking on a panel of electronic trading executives sponsored by PriceWaterhouseCoopers and Wall Street & Technology in New York today. Recently, Nasdaq officials have suggested creating a central limit order book, essentially placing the largest and oldest electronic market at the center of the growing digital equity markets. It is a clear response to the electronic communications networks (ECN), such as Houtkin's Attain, which primarily serves the day trading clients of his All-Tech Investments firm. This ticks Houtkin off. "The time for Nasdaq to create a central limit order book was ten years ago," he said. "They really screwed that one up, and now they want to come in and take over what the ECNs have created." But what really gets him is the suggestion that the market needs intermediaries such as Nasdaq market makers, well-capitalized traders that guarantee they will provide liquidity in exchange for certain pricing privileges. "I hate when they say they can make markets because they have relationships with people. What kind of relationships are they talking about? The country club kind of relationships? I'm just a guy from Brooklyn, what do I know about that?" he said. Rather, he thinks the big money houses should create liquidity in certain thinly traded stocks when someone gives them a call to fill an order, not as a matter of course. "I'm not ruling out talking. I think talking is fine," he said. The regulators, he says, have their place when it comes to pursuing fraudsters, but too many of today's regulations are purely to protect the older exchanges from competitors like him, he said. And you should hear the things he calls New York Stock Exchange Chairman Richard Grasso. Even Securities and Exchange Commission Chairman Arthur Levitt doesn't escape Houtkin's wrath. That is because Levitt has recently criticized a NYSE rule forbidding electronic markets that are not registered exchanges from trading in NYSE listed stocks. Houtkin says Levitt should quit his griping and just eliminate the "damn rule." Houtkin vows to keep howling against Wall Street until the markets are completely electronic and the market makers go home. And even though that may seem a distant goal, the rise of ECNs has given his rhetoric a little more credibility. "Years ago they were conspiring to get rid of me, and now I'm speaking on panels," he said. "Imagine that." forbes.com