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Elaine Wah

Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

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March 1, 2003

On Top of the World: Cantor Fitzgerald, Howard Lutnick & 9/11. A Story of Loss & Renewal

By Gregory Bresiger

Also in this article

  • On Top of the World: Cantor Fitzgerald, Howard Lutnick & 9/11. A Story of Loss & Renewal

(Harper Collins, New York, $25.85) 282 pages

by Tom Barbash

Reviewed by Gregory Bresiger

Take a disaster such as the tragic September 11. Consider its effect on a

firm trading equities and bonds, a firm in which most of the assets of the business were truly lost as the towers came down. Have a bunch of tabloid tube personalities - many of whom have no more understanding of trading or business than a pig understands Sunday - explain it to us.

Now what happens?

You have a second disaster, a disaster of misunderstanding as the tube personalities attempt to demonize Howard Lutnick, chairman of Cantor Fitzgerald. This book, which was written by a college friend of Lutnick, chronicles his experience and those of his firm pre- and post-9/11. Lutnick's brother and best friend died in the terrorist act and his firm almost went down with the World Trade Center towers. Lutnick missed death because he was taking his son to school on that fateful day.

Lutnick's problems begin with tabloid elements of the tube media, according to this book. They include criticism leveled at him by the notoriously moronic Connie Chung, the hotheaded Grand Inquisitor Bill O'Reilly and the always-simpleminded Barbara Walters. They are a few examples of media big shots that, in the months after September 11, all but branded Lutnick as the anti-Christ.

Cantor Fitzgerald lost most of its stars in the World Trade Center crash and faced a struggle for survival. Seven hundred of its most talented people died on September 11. Three hundred shell-shocked survivors were left to carry on. Competitors could sense that they could take business from the once mighty Cantor Fitzgerald. But that was probably not the biggest problem. Media vultures were waiting for Lutnick.

The media feeding frenzy began after September 15. Just after the tragedy, Lutnick, in some emotional interviews that included crying on television when he reflected on the deaths in his business and his family, made some hard choices.

With Cantor Fitzgerald facing a battle for survival, Lutnick believed that those killed in the terrorist act had to be taken off the payroll.

"In Howard's mind, there was no choice - if he continued to pay the salaries, they'd lose the company." (page 67.) He also decided that medical and other benefits for the families of the victims would continue for 10 years and the families of the victims would receive 25 percent of Cantor Fitzgerald's profits for the next five years. (Estimated to be some $150 million).

Profits and bonuses were rather dicey propositions because who knew if the firm could remain in the black. And the man in charge of the bonuses died in the disaster. Also, many of the families didn't understand exactly how bonus money is generated.

Still, many of them also thought spouses were generating big money. That's even though it had been a bad year. A Cantor Fitzgerald relief fund was also set up. The tabloid tube masters, led by the idiotic Chung, jumped on the payroll decision and simply ignored everything else, especially factors that didn't fit in with their Lutnick is a devil thesis.

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