NYSE

In 1982, a mere short career ago when i was a broker at the venerable firm of Kidder, Peabody and Co., Inc. it was my good fortune to sit in the NYSE Board Room and listen to the fodder espoused on the specialist system and market surveillance. Some things never change. The small room where a couple of geeks sat to uncover insider trading was rather laughable. I laughed at it then and i laugh at it now. The hundreds of millions of dollars pumped into the computers systems at the NYSE were not meant to uncover illegal trading by any stretch. They enable the "insiders" to make their bucks and then some. Back then, the likes of Boesky were busy doing their thing. Today, as proprietary trading accounts for over half, yes over 50% of daily volume and the specialists continue their monopoly on trying to steal a buck from the "middle" of the spread to maintain the "fair and orderly market" lingo that permeates the Exchange even today, I keep looking for Elliot Spitzer. Why pray tell, should specialists be allowed to profit on daily trade? Our NYSE marketplace is one of few in the world where the specialist/market maker is actually allowed to take a position in the asset being traded. They trade against customer order flow every single day. The purpose of any market is to facilitate the exchange of goods and services, to facilitate trade whether that market is for guns, butter or bonds. Worrying about Grasso's paltry $190 million is chump change when the cost of the middleman, working every day in the bid-ask spread, is added up every quarter of every year. Take a look. It is easy. It is public record. Check out the quarterly filings of the publicly traded specialist firms. And you thought the system was fair?