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Why the NYSE trading halt should alarm investors
MarketWatch
David Weidner
7/8/2015
Excerpt:
SAN FRANCISCO (MarketWatch) — Look out, China. The Big Board on Wednesday suspended trading in all stocks.
OK. Bad jokes aside, the sudden and unexplained halt in trading Wednesday at the New York Stock Exchange should alarm investors. Even if the NYSE is not the victim of cyber terrorism and is simply experiencing a regular technical glitch, if the exchange was forced to hit the “off” switch, it signals a vulnerability of a market that is almost entirely electronic and highly technical.
What’s worse: United Continental Holdings UAL, -2.38% planes were grounded today after a computer glitch. And the Wall Street Journal’s Web site was down temporarily.
“Anybody who has a computer knows they crash periodically — nothing's perfect,” said Michael Goldstein, a professor of finance at Babson College and former NYSE economist. “Adding all of these together, in the world we live in now — we’re talking about an airline and major stock exchange — having major computer problems should make people nervous.”
Goldstein said you have to ask yourself: “What would a cyber attack look like?”
Maybe like this.
For the NYSE, the glitch is especially troubling given the lumbering investigation into the 2010 “flash crash” in which stocks tumbled, according to regulators, due to the work of a single trader in Britain who was “spoofing.” The alleged perpetrator wasn’t named until five years and more than 1,000 trading days later.
To be sure, there is a big difference between a potential cyber attack, a computer glitch and a trader breaking the rules. On the flip side, it’s fair to ask if exchanges, whether it be the NYSE, a unit of the Intercontinental Exchange Inc. ICE, -1.75% the CME Group Inc., which owns the Chicago Mercantile Exchange CME, -0.23% and the Nasdaq are truly the safe and secure marketplaces they claim to be.
Poll after poll shows market trust is in the dumps. Last summer, Better Markets found that 64% of voters don’t trust the markets and 60% support more regulation. A poll by CNBC in March 2014 found 75% of respondents felt the market was “rigged.”
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View the complete article at:
http://www.marketwatch.com/story/why...ors-2015-07-08
MarketWatch
David Weidner
7/8/2015
Excerpt:
SAN FRANCISCO (MarketWatch) — Look out, China. The Big Board on Wednesday suspended trading in all stocks.
OK. Bad jokes aside, the sudden and unexplained halt in trading Wednesday at the New York Stock Exchange should alarm investors. Even if the NYSE is not the victim of cyber terrorism and is simply experiencing a regular technical glitch, if the exchange was forced to hit the “off” switch, it signals a vulnerability of a market that is almost entirely electronic and highly technical.
What’s worse: United Continental Holdings UAL, -2.38% planes were grounded today after a computer glitch. And the Wall Street Journal’s Web site was down temporarily.
“Anybody who has a computer knows they crash periodically — nothing's perfect,” said Michael Goldstein, a professor of finance at Babson College and former NYSE economist. “Adding all of these together, in the world we live in now — we’re talking about an airline and major stock exchange — having major computer problems should make people nervous.”
Goldstein said you have to ask yourself: “What would a cyber attack look like?”
Maybe like this.
For the NYSE, the glitch is especially troubling given the lumbering investigation into the 2010 “flash crash” in which stocks tumbled, according to regulators, due to the work of a single trader in Britain who was “spoofing.” The alleged perpetrator wasn’t named until five years and more than 1,000 trading days later.
To be sure, there is a big difference between a potential cyber attack, a computer glitch and a trader breaking the rules. On the flip side, it’s fair to ask if exchanges, whether it be the NYSE, a unit of the Intercontinental Exchange Inc. ICE, -1.75% the CME Group Inc., which owns the Chicago Mercantile Exchange CME, -0.23% and the Nasdaq are truly the safe and secure marketplaces they claim to be.
Poll after poll shows market trust is in the dumps. Last summer, Better Markets found that 64% of voters don’t trust the markets and 60% support more regulation. A poll by CNBC in March 2014 found 75% of respondents felt the market was “rigged.”
.............................
View the complete article at:
http://www.marketwatch.com/story/why...ors-2015-07-08
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