Yesterday’s glitch is producing some fascinating tension between the NASDAQ and the NYSE, or more broadly, tension between old-style trading, and super-fast electronic trading.
On CNBC, NYSE Euronext CEO Duncan Niederaur is on defending his firm against charges from the NASDAQ that it was their specialists who walked away and caused volume to disappear.
“The other markets traded through us… the depth of book on these electronic markets is very thin.”
“We never traded P&G down.”
The whole thing, he says: “Certainly reduces credibility in the system.”
He continues to hammer away at the thinness of electronic markets.
Niederauer: “Trade on the primary exchange”
Update: The comments from NASDAQ CEO Bob Greifield are here and were made on CNBC this morning:
WAPNER: YOU ARE SAYING DEFINITIVELY THAT IT WAS NOT A PROBLEM WITH THE NASDAQ ELECTRONICS SYSTEM?
GREIFELD: NO IT DEFINITELY WAS NOT OUR SYSTEM FUNCTIONED FLAWLESSLY. WE LOOKED AT OUR CUSTOMER ACTIVITY AND IT WAS IN THE NORMAL RANGE. WHAT WE SAW HAPPEN IN THAT NERVOUS PERIOD OF TIME WAS FUTURES ACTIVITY WAS CRESTING —
WAPNER: IN 16 MINUTES OF TIME WE SAW A TREMENDOUS SWING IN THIS MARKET.
GREIFELD: IT REALLY WAS SHOCKING WHAT HAPPENED. IN THIS NERVOUS PERIOD OF TIME WE SAW THAT THE NEW YORK STOCK EXCHANGE AND STOCKS THEY LISTED, THEY DID NOT CALL A HALT BUT THEY BASICALLY WALKED AWAY FROM THE STOCK. THAT LACK OF LIQUIDITY IN THE TRADING OF THEIR STOCKS IN SUCH AS P&G AND ACCENTURE THAT NERVOUS PERIOD OF TIME HAD A DISPROPORTIONATE AFFECT ON WHAT HAPPENED TO THE STOCK.
WAPNER: IT SOUNDS TO ME LIKE YOU ARE BLAMING THE NYSE AND THE SPECIALISTS DOWN THERE