Exclusive: The Culture of the New York Stock Exchange

I recently met up with Art Cashin, director of floor operations at UBS and a regular on CNBC for years, on the floor of the New York Stock Exchange.

I asked him about the culture of the NYSE, and he told a great story about how trading is like football. Have a look (transcript follows):

Cashin: I recall that back when General Foods was being taken over by Philip Morris, there was a crowd of about 40 or so people aggressively bidding and offering in the stock. I was a governor at the time, and that means somebody who helps keep the process going along and make sure everybody follows the regulation and that we're all trading in one area, so I had climbed up on the jump seat, the little fold-down seat of the specialist, and I'm sure to you or any of the viewers I must have looked like a somewhat bemused orchestra conductor saying, No, here, over here. You get together here to make sure that we were always trading at the same price.

When I got a little dry and raspy after about an hour of that, I got down and walked past a group of earnest looking young men in their twenties and dark suits, and as I walked by looking at this almost raucous looking crowd, one of the men said, Isn't it a shame what greed will do? I took a couple of steps and I said, I really can't let that go and I went back and I said, Young man, you don't really know what you're looking at. I said, Those people are not there for putting money in their own pocket. They're trying to get a better price for somebody they will never meet. Some of them not quite as old as I am now, perhaps risking heart attacks to try and get a better price for somebody they would never get a chance to meet.

That's the greatest thing about the agency business. It is something that I loved for all those years. We had a fellow down here who was in the National Football League, and at one point when things were quiet, he said to me, You know what you guys do down here is kind of like the National Football League. I said, No, it can get a little rough, but it's not quite that difficult. Why do you say that? And he said, Because when I was in school and my roommate was my best friend and I was later best man in his wedding and godfather to his child, but we wound up on different teams. Then every Sunday we would compete to try and make the other one look not so good because of his fans. And you guys, meaning the members on the floor every day, come in and compete with people you've known for decades, and try and do whatever you can to get a price for your client rather than have them achieve the same thing for theirs. And somebody said it was kind of like the perfect Miller Beer commercial, because at the end of the day, as much as I would compete and struggle with you to make sure nothing was carried home, I'd say, You want to stop and have a beer and talk that over? So during the day, it was all about the clients; at the end of the day, it was the normal relationships people have everywhere.


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