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The Banshee on Wall Street

Traders Magazine, January 2004

John A. Byrne

With apologies to Howard Dean, his recent atomic explosion did not shock the trading jocks in New York nor, indeed, the denizens of the savage trading pits in Chicago. Even the pros piloting the ATS and ECNs get carried away. Baying like a famished wolf is actually good manners. The muscular stories of human emotions run amuck the banshee let loose in the dying moments of a rising or falling market are wrapped up in the lore of Wall Street. Ripped-up phones, subordinates trembling at the words of their lieutenants you lifted that bid too early, cuz' are like gin and tonic. That's why Howard Dean is needed on Wall Street. He knows about electronic communications. He comes from a family of financial tycoons. He also knows how to spell the word nonsense. So, should he accept his Wall Street mission, Dr. Dean must assemble his war cabinet. He must gather intelligence on market structure, including penny trading, wallpaper spreads, principal and agency trading, day trading, transaction cost analysis, best execution, statistical arbitrage, the trade through rule, short selling, Reg FD, Rules 11Ac1-5 and 6, order handling, soft dollars, interpositioning, front-running, Manning Rules, ETFs, late trading and the NSCC's vaunted Fund/SERV system. He must recall the history of Harvey Houtkin and his SOES bandits and he must study the separation of the NASD from Nasdaq. He must study the files on Dick Grasso and arrange a coffee morning with John Reed. Then Dr. Dean must make the rounds of the talk shows and the financial media. He must appoint himself the man who can save the trading world. Sure, he can spar with Al Sharpton. But mostly, he must show up with the SEC Chairman Bill Donaldson and have his photo taken with the Fed boss, Alan Greenspan. Eventually, Dr. Dean will look and sound like - and most investors will not question this - the savior of the trading world. Dr. Dean will receive various honorary titles from financial groups and he'll have gravitas. "The trade through rule is just a bunch of baloney," he'll tell CNBC. "Want to hear my take on penny trading? Gimme a break! Investor protection? Cool. Bring back some nickel trading. Next." Over time it may sound as if Dr. Dean has been programmed. But his message will resonate, like a banshee cry, his primal screams spreading shock and awe. The public will be overwhelmed and the regulators will take notice. Eventually, the banshee man may pull it off he'll single-handedly bring commonsense back to the markets. Then, the banshee cry itself will slowly disappear, replaced by the soft sounds of birds welcoming a new morning in America.

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