One of the first things we all heard our coaches say in “Little League” or “Pop Warner” was, “There is no I in team.” When I first entered this business in ’93 it seemed we were all just spokes in a much bigger wheel. To my laymen opinion it seemed that a pretty good balance had been found. Bulge bracket houses were certainly raking in the dough. The wholesalers were reaping the rewards of their niche and certainly not complaining. The Hedgies and the Mutual Funds were gathering assets hand over fist and every single person I knew wanted to be a part of the game. Everyone wanted to work on Wall Street. The Fido’s of the world were asking the Goldman’s where they would buy 250k to work a million. Goldman would lose 35k on the first print and then turn around and make 150k working the rest of the order when they found the buyer. The buy side trader who actually had 3mm for sale would look like a hero to his PM cause of the initial print, and the BD who got the last 500k made a quarter on the residual and everyone went home happy as pigs in shit. Happy husbands and wives went home to their kids, wives were planning vacations and sweet 16 parties, and everyones biggest concern was hiding the AMEX charges from their significant other. AHHH, but then just like barbarians storming Rome, the SEC and the regulators felt like they needed to protect, “the average investor”.
First of all I know I am not that bright, but who exactly is this average investor? Is he the guy day trading his 401k on E-trade, or some broker in a phone booth shilling a cold fusion stock to his 3 page client list that he got from cold calling. Someone please explain to me what I am missing.
Out went happiness in went in things like Reg NMS, decimalization, mid day crosses, and Manning. Oh by the way margins went right out the door also. I’m going to make the argument that these changes for the every man actually have made the market less transparent. No more bidding for 250k to work a million. No one can afford to lose 35k on a print hoping to make a whopping .02 cents on the rest of the order that might never come. Everyone loses. No big print to flaunt in front of the PM, no left over wholesale kiss, which means no Yankee tickets for the family. No more stocks holding inflection points cause the street knew there was size at that level. Cancel the sweet 16 and I’m going home to beat my wife instead of kiss her. The question is “why the hell did this happen”. So Joe main street could get a report on his sale of 500 shares @ 26.26 instead of 26 1/4? I just don’t get it. How is the fact that no one is making as much money helping anyone? In fact we are all just disadvantaging ourselves in reality. Instead of all working with each each other and splitting the loot, we are knocking each other off like Deniro whacking his crew after the Lufthansa heist in Goodfellas. Insanity if you think about it, we killed the golden cow, in order for some schmuck’s to feel they were on an even playing field.
Have no fear this is just the beginning. America is far from done tearing itself down from the inside. first Wall street, then came the housing market. Why pay a broker, I can sell it myself and save the commission. Hey this is easy I am going to start buying homes and financing the shit out of them and flipping them for big bucks. Over and over, like that god damn channeling stocks.com commercial. Now Obama and the dems are going to destroy health care, and the auto industry. We are going to socialize and regulate the entire country. Don’t bother asking yourself why, cause the answer you are going to get is that we did it for the everyman, or the individual investor, or Joe main street, or some other fictional name made up by a pencil pusher with an agenda who thinks he was born to “make a difference”. This is a domino effect my friends and we are all going down unless we break the chain. It started in Pennsylvania with the bashing of Specter, don’t let it stop.
Six Gun
