Quote from Hydroblunt:
Ironically, in Richard Ney's book he mentions several occasions from 1970s where NYSE simply refused to fill market orders in any timely manner, halted stocks and just gapped the hell out of them the next day. Look if the market is tanking, you can't blame market psychology and I really doubt whatever little benefit NYSE provided on that day even comes close to outweighing what they have stolen over centuries. Plus, the Nasdaq of 1987 was quite different from today, there were several regulations passed because of that day. Market Makers, in general, are heavily regulated now because of the abusive power they had which was on many levels equal to what the NYSE specialists can do. Now that most of this fast intraday action is dominated by computers, whatever happens during these extreme cases is just market action. NYSE stock can and have simply gapped down points at the whim of the specialist upon a market order, without any ECNs in the middle, there is ZERO liquidity whatsoever.
It was documented in the recent years that the specialist only truly provides liquidity at the tops and bottoms, in other words, when it is obviously profitable to him. There is a very interesting article you can find through a yahoo or google search where during the mid-1990s the IBM guy tried to claim greatness and honorability when the company stock was gapping down over 10% due to missed earnings. He took in smth like half a mil shares of a 2 mil opening print (dont quote me on the numbers). He was up several points in a half hour. Lot of ppl & institutions were pissed since the gap down was obviously overexaggerated so that the NYSE scum could make a couple easy mil. I think any of us would love to provide liquidity like that, thats why NYSE traders read the tape to catch these manipulations and get on the specialist's side. The institutions have really taken a stand against NYSE abuses over the last few years, the pennying did not go over too well with the smaller funds as they have been filed complaints en masse. It's over, the big boy banks want the racket for themselves, Goldman Sachs will make much more money through their algo progs & spreaders than through Kellogg, Spear & Leeds.
This is information that has been known and even documented since 1960s. The NYSE was set up as one big racket where the insiders are controlling and manipulating prices to scam the investing public and the little guys. For christ's sake, some of these guys are still Staten Island hoodlums with barely a high school education that were privilieged enough to be born in the right family. That's what specialist firms are, families that happened to hold control of their racket at the Big Board. How many more clues does a person need to understand what really holds the NYSE together and makes it tick? If its system is so great why is no other exchange in the world even bothering to consider emulating it? It's laughable to some people, some a$$hole in the middle with ridiculous order execution control, exclusive order flow info and the right to trade proprietary. The conflict of interest is obvious to anyone with half a brain.
