Debt of Honor - Tom Clancy [187]
Things could have been done differently. Each sale/purchase order could have been sent out immediately, but that was untidy-the sheer administrative volume would have taxed the abilities of the entire industry. Instead, the purpose of DTC was to bring order out of chaos. At the end of each day, the transactions were organized by trading house, by stock issue, and by client, in a hierarchical way, so that each house would write a limited number of checks—funds transfers were mostly done electronically, but the principle held. This way the houses would both save on administrative expense and generate numerous means by which every player in the game could track and measure its own activity for the purposes of internal audit and further mathematical modeling of the market as a whole. Though seemingly an operation of incomprehensible complexity, the use of computers made it as routine and far more efficient than written entries in a passbook savings account.
"Wow, somebody's dumping on Citibank," the sys-con said.
The floor of the New York Stock Exchange was divided into three parts, the largest of which had once been a garage. Construction was under way on a fourth trading room, and local doomsayers were already noting that every time the Exchange had increased its space, something bad had happened. Some of the most rational and hard-nosed business types in all the world, this community of professionals had its own institutional superstitions. The floor was actually a collection of individual firms, each of which had a specialty area and responsibility for a discrete number of issues grouped by type. One firm might have eight to fifteen pharmaceutical issues, for example. Another managed a similar number of bank stocks. The real function of the NYSE was to provide both liquidity and a benchmark. People could buy and sell stocks anywhere from a lawyer's office to a country-club dining room. Most of the trading in major stocks happened in New York because …it happened in New York, and that was that. The New York Stock Exchange was the oldest. There were also the American Stock Exchange, Amex, and the newer National Association of Securities Dealers Automatic Quotation, whose awkward name was compensated for by a snappy acronym, NASDAQ. The NYSE was the most traditional in organization, and some would say that it had been dragged kicking and screaming into the world of automation. Somewhat haughty and stodgy—they regarded the other markets as the minor leagues and themselves as the majors—it was staffed by professionals who stood for most of the day at their kiosks, watching various displays, buying and selling and, like the trading houses, living off the "middle" or "spread" positions which they anticipated. If the stock market and its investors were the herd, they were the cowboys, and their job was to keep track of things, to set the benchmark prices to which everyone referred, to keep the herd organized and contained, in return for which the best of them made a very good living that compensated for a physical working environment which at best was chaotic and unpleasant, and at its worst really was remarkably close to standing in the way of a stampede. The first rumblings of that stampede had already started. The sell-off of Treasury notes was duly reported on the floor, and the people there traded nervous looks and headshakes at the unreasonable development. Then they learned that the Fed had responded sharply. The strong statement from the chairman didn't—couldn't—disguise his unease, and would not have mattered in any case. Few people listened to the statement beyond the announcement of a change in the Discount Rate. That was the news. The rest of it was spin control, and investors discounted all of that, preferring to rely on their own analysis.
The sell orders started coming. The floor trader who