No I think cnbc guy was referring to the specialists coming off the floor and moving to the desks. It's about time. The floor of the nyse will basically become what the nasdaq floor is like now. with just alot of screens and a few floor traders put on the floor for show.
NYSE Specialists going away next year?
- Thread starter Triple X
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Quote from eagle:
What is the price for a ticket? Need reservation or walk-in?
Don't matter as long as I can sneak in rotten eggs to throw at those maggots.
I might have it wrong, but Cramer did bash goldman for butchering the print, so I assumed they were the broker working for the unknown seller.
Actually the specialist business is not that profitable. Apologies for going off on a tangent. Back in one of my previous lives in an ibank, the ibank bought a specialist firm (no, not the SLK/GS deal, if anyone is wondering), and then the dot-com bubble burst. This specialist firm (subsidiary after the purchase) was sitting on about $30-40M of stock inventory in 300 or so names that all of sudden became pretty much worthless. The ROE on a typical specialist firm (say, Knight, SLK, or Herzog) is also significantly lower than an ibank (around 10-13% for the specialist, and 20+% for ibank). So the ibank put together a team to recover some value in this inventories, and I went to a few of these strategy meetings (heck, the whole thing was still sitting on the books as an "asset"). I think the head of equities jokes that if someone offered him an used Mazda, they can have all the inventory (hint, it probably cost more in NASD/SEC fees to "sell" these stocks than the whole thing was probably worth).
Fun, if not outright strange, memories.
Nope, the low ROE is fairly standard amount specialists (except, of course, the haydays of dot-com bubble), look at the 10-K of Knight, LaBranche, etc. Knight is pumping up their ROE (by becoming a quasi-ibank) by entering into capital market and asset mgmt business, since 2000, NITE ROE is hovering around 13-17%. LAB is probably about the same (I haven't looked up). Compare this to MER/MS/GS/LEH/BSC, etc, the ibanks' ROE typically is around 20-30%.