Random Thoughts: A Historic Moment in Free-Market Capitalism

By Todd Harrison  DEC 20, 2012 9:47 AM

The NYSE and ICE join forces in the battle for share.



Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

The bombshell this morning — wait, wrong vernacular albeit subconscious — the left-fielder today comes by way of the IntercontinentalExchange (NYSE:ICE) stepping up to buy the venerable NYSE Euronext (NYSE:NYX).

You might remember that Deutsche Bourse attempted to buy NYSE at the end of 2010 — I sure do — and regulators put the kibosh on that deal, consistent with our vibes at the time that isolationism and protectionism are the "other side" of globalization.

This deal speaks volumes about trading volumes, or lack thereof, and we'll likely see more consolidation in the space. We should also note that HFT (High Frequency Trading) is a massive driver of order flow and the emerging scrutiny of the black box world may have played a hand in this deal getting done.

Either way, I am happy to hear they'll keep the NYSE floor intact; while it's more of a museum than a business driver in the digital age (as evidenced by the fact that ARCA could have, and indeed initially planned to open trading during Hurricane Sandy while the floor remained closed), it remains the single-largest symbol of free-market capitalism and a very special place.

On a personal note, I would like to congratulate the folks at the NYSE and wish them all the very best in this new Exchange order; they have been staunch supporters of The Ruby Peck Foundation (full disclosure) and I'm lucky to call a few of them friends.

This is a historic moment; soak it in.

Random Thoughts:
All worthy food for thought; there are two sides to this debate and perhaps I hadn't fully vetted my view before sharing it. That's the risk when writing in real-time, but I wanted to share this fare in the interest of balance. Where you stand, much like those who follow the markets, will largely be influenced by where you sit.

Watch gold -- and good luck today!


Twitter: @todd_harrison

Position in SPX.