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Next Target: Wall Street

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posted on Nov, 6 2004 @ 07:46 PM
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There's been a lot of speculation lately about another upcoming terrorist attack on US soil. Much of it has talked of economic targets.

After 9-11 there was a lot of talk about it being an economic target as well as a symbolic one. However, judging by news reports, the economic fallout from the event was relatively limited.

Does anyone know if there were an attack on the New York stock Exchange, what would be the extent of the economic effects? Would it be business as usual because the other stock exchanges around the country would still be running? Is there an emergency, secondary site set up where trading could continue? Or could it possibly trigger a stock market crash of unprecedented proportions?


english.people.com.cn...
Besides causing human casualties, possible terrorist attack on these financial institutions could completely paralyze the world financial markets, as an average 1.4 billion shares are traded in the NYSE every day and more than 130 billion dollars worth gold bullion are stored in the Federal Reserve Bank, only two blocks away from the NYSE.


The same article goes on to speak of some contingency plans to continue trading, however these seem to be mostly seperate plans from individual financial institutions rather than a coordinated plan for the entire market.




posted on Nov, 7 2004 @ 05:21 AM
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It would be a disaster for the US economy. Technically speaking we could have an alternative location to carry on trading, but politically and economically speaking that would have very serious ripercussions IMHO.



posted on Nov, 7 2004 @ 05:24 AM
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Originally posted by WisdomMaster
It would be a disaster for the US economy. Technically speaking we could have an alternative location to carry on trading, but politically and economically speaking that would have very serious ripercussions IMHO.


NOT true. I mean of course the panic and fear would have an impact.

But after 9.11 the NYSE and all stock exchanges are required by LAW to have multiple backup systems.

The key word is decentralization. There is no one target.



posted on Nov, 7 2004 @ 06:41 AM
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that is very true the commercial intake is the entire world i mean set a bomb in new york commercial distract and yeah we would feel a hellavu sting but nothing we cant get over. now systematicall blow up every single walmarts in america and then we have a problem



posted on Nov, 7 2004 @ 08:13 AM
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I believe there are 3 hidden locations around the new england area in the event that the NYSE is attacked either physically or with a very sophisticated virus. However once trading resumes post attack the bombshell this economy would face would be tremendous.


www.nycp.org...



posted on Nov, 7 2004 @ 09:25 AM
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Wall Street is just a well-networked building with trader's on the floor.

It would be rediculous to think that they have multiple redundant data management centers offsite, without having contingency for a redundant trading floor also as well as trader's.

Basically if they were to attack Wall Street, it would just be a one week hiccup to get back up and running, and would only destroy a building and end the lives of those within.

But alas, the economy would probubly react negetively, regardless if their was a delay in the trading floor opening back up.



posted on Nov, 7 2004 @ 10:09 AM
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Technically you don't even need a stock exchange or a trade floor, you could trade stocks in the bathroom if you wanted to.

Yes there are multiple redundant data centres that record all goings on so data would not be lost.



posted on Nov, 7 2004 @ 10:25 AM
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Could it be that an adverse effect on the economy/stock market would not be due to the actual physical loss of the stock echange site, but rather due to panic and a sharp decline in trader confidence? If the NYSE was destroyed, shareholders might drop US corporations' shares like a spider-infested apple, everyone scrambling to get rid of the shares before the price drop, which in turn causes further price drop, etc etc...you know the drill.



posted on Nov, 7 2004 @ 11:22 AM
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Originally posted by wecomeinpeace
Could it be that an adverse effect on the economy/stock market would not be due to the actual physical loss of the stock echange site, but rather due to panic and a sharp decline in trader confidence? If the NYSE was destroyed, shareholders might drop US corporations' shares like a spider-infested apple, everyone scrambling to get rid of the shares before the price drop, which in turn causes further price drop, etc etc...you know the drill.


No.

If you'll remember, the NYSE suspended trading on 9/11 because of damage and problems. The Stock Exchange is simply a medium of trade.
Let's try an analogy:

If your local grocery store was taken out by a huge truck bomb of the Anti-Johnny-Appleseed League, would apple buyers everywhere suddenly quit buying apples in a panic and would truckers stop shipping apples and would apple growers suddenly find their orchards destroyed and their fruit unsellable?

No -- of course not. And this is the one piece of the puzzle that you're missing.

The actual stocks are owned by the company. You can actually buy the stocks directly from the company in some cases (DRIP stocks are one type of stock that you can buy directly.) Or a broker can buy directly for you from the company.

The stock exchange is a convenient trading area but if the entire city of New York sank under the waves tomorrow, trading would still continue and people could still buy stocks. There'd be a huge scramble while the electronic records were restored, but the loss of the building and personnel would not cause a market collapse.

It would, however, scare everyone for awhile but trading would resume the next day.

(edited to add that there are hundreds of tiny little legal stock exchanges as well as the big NYSE one.)

[edit on 7-11-2004 by Byrd]



posted on Nov, 7 2004 @ 11:52 AM
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Unlike the NASDAQ or other electronic exchanges, the antiquated NYSE relies on a specialists--people that regulate trading in each individual stock--that reside physically on the floor of the stock exchange. While the systems that these specialists use are redundant, the people that run the floor are a unique breed and are not easily replaced. An attack on the NYSE would forever change the NYSE, but would not forever devastate Wall Street--not by a long shot.

While most NYSE stocks also trade on the third/fourth markets (listed stocks trading on NASDAQ or on electronic systems known as ECNs), disruption of the specialist system would cause trading in listed names--think most of the stocks that comprise the Dow Jones Index & a great deal of those in the S&P 500, to initially come to a screeching halt. Options trading would also be horribly screwed up, effecting the entire mutual fund industry, program trading and any trading activiting that requires hedging. Confidence in the market would be damaged and as Wall Street is still in recovery from 9/11 would feel another big blow. It would be a big mess for quite a while.

However, Wall Street would recover. Thinking about it from a practitioners standpoint, the NYSE specialist system has been holding the marketplace back. The specialist system adds an inherent cost to trading, is less efficient that electronic systems, and adds quite a bit of opportunity for market manipulation. There has been an intense movement to modernize the exchange going on for years, but the only thing that has held the industry back is the stronghold that the specialists have on the NYSE--they own it. A compromise has been proposed to reform the system in the form of a hybrid specialist/electronic exchange system, but specialists are still resisting because any form of electronic trading means the end of their highly lucrative industry.

I'm not saying that money managers would welcome an attack on NYSE specialists in order to get them out of the picture and modernize the exchange--it would be quite the contrary actually as the confidence shock will have a detrimental effect in the short run. However, this would not be the end of Wall Street--in fact, it might be a case of turning lemons into lemonade.

A disruption of the NYSE would force interim trading in listed stocks on to electronic platforms, which would immediately improve efficiency and investment returns. Long-term, the net effect would be a rebuilt NYSE that would be much more efficient--it would no doubt have to be built using an all-electronic model because the number of trained specialists needed to keep the open-outcry model orderly just wouldn't exist. As I mentioned before, these are a unique breed of people and they usually train via apprenticeships--an attack that wipes them out would essentially end the specialist system forever.

In order for terrorists to destroy Wall Street, they would have to find a way to not only shut down the NYSE & NASDAQ, but also the electronic exchanges where more than 60% of the daily volume is traded--and all of the multiple backup systems. Even if NYC was nuked, after the dust settles, trading will still go on because there are backups in other cities--and outside the U.S.

The futures markets however, are mostly reliant on open-outcry--meaning that they require the trained professionals in the trading pits to make sure that the markets are operating efficiently. While not as prestigious a target as the NYSE, hitting the NYMEX would send crude oil futures--all energy futures-- into a tail-spin. In fact, it would send shockwaves through the entire oil industry, which would have a severe impact on oil, gas & coal prices. The systems are redundant, but the people aren't--and you can't just train-up new pit traders overnight and ship them off to an alternate location.

I live two blocks from the NYMEX and compared to the NYSE, security is a joke. The exchange is located right on the waterfront--literally a few yards from the Hudson River. God help us.



posted on Nov, 7 2004 @ 12:03 PM
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And BTW, an orchestrated simultaneous attack on the IPE in London (which does allow electronic trading in some contracts, thank goodness) & the NYMEX would leave us all paying $200 a gallon for gas. Yikes. I would be more worried about that than an attack on the stock market.



posted on Nov, 7 2004 @ 12:33 PM
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Great post lmgnyc. Very informative. Gave you a "Way & Above"


It seems that the NYMEX is prepared though:

www.wordiq.com...
After the terrorist attacks, the NYMEX has built a $12 million trading floor backup facility on Long Island with 700 trader's booths, 2,000 telephones, and a backup computer system. This expensive backup is needed in case of another terrorist attack on Lower Manhattan or a natural disaster.


Here's what NYMEX did during and after the 9-11 attacks.
www.iwar.org.uk...

If we have this info, then terrorist groups surely do. Perhaps an attack on stock market(s) can be ruled out.



posted on Nov, 7 2004 @ 01:53 PM
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Originally posted by wecomeinpeace
Great post lmgnyc. Very informative. Gave you a "Way & Above"


It seems that the NYMEX is prepared though:

www.wordiq.com...
After the terrorist attacks, the NYMEX has built a $12 million trading floor backup facility on Long Island with 700 trader's booths, 2,000 telephones, and a backup computer system. This expensive backup is needed in case of another terrorist attack on Lower Manhattan or a natural disaster.


Here's what NYMEX did during and after the 9-11 attacks.
www.iwar.org.uk...

If we have this info, then terrorist groups surely do. Perhaps an attack on stock market(s) can be ruled out.



Thanks for the vote!


I would hope that they also recognize that it is impossible to cripple Wall Street. Terrorists must realize that not only the exchanges, but the systems have become highly decentralized. Perhaps Wall Streeters were scared out of their wits by the scenario described in Tom Clancy's "Debt of Honor", where the financial industry was attacked, but over the past ten years, redundancy has become part of systems planning--as well as competition providing multiple outlets for trading.

It could be that terrorists are hoping that just the threat of an attack will shake confidence in the market.

However, the NYMEX is one of the few remaining exchanges that relies on people to keep it going-- and it handles the bulk of the world's energy futures trading. The NYMEX has claimed that oil & gas trading in not conducive to electronic trading--open outcry is necessary, which is probably why their electronic systems are not widely used. They have even gone so far as to build another open outcry branch in Dublin instead of furthering electronic trading systems.

My worries are about where the new NYMEX at the World Financial Center is located an the safety of the floor traders. The people on the exchange floor are vital--if something happens to them, the energy markets will be devastated, which will have a follow-on effect of severely hampering distribution and delivery in the oil & gas industry.

During the 9/11 attack, all of the NYMEX floor traders and employees were safely evacuated and able to be relocated to an alternate site, so trading was barely affected. However, what I am concerned about is an attack that does not allow evacuation. The new building at the World Financial Center (which I am looking at through my living room window right now), is rather vulnerable for many reasons. Let's just hope that I am giving the terrorists much more credit than they deserve.



posted on Nov, 7 2004 @ 04:58 PM
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It's not about continuing trading after an attack, as the markets would plunge, it's about avoiding any attack. A redundant or distributed system can guarantee that trading goes on to record the greatest fall of the stock markets in history?

After an attack on a stock exchange the economy would fall, expecially now that Adolf Bush is in power. If Adolf Bush can't protect the country, who will be able to? Rember, what's the most feared enemy of stock markets? UNCERTAINTY.
If now markets are doing well is because war is good for America, as lots of money are pumped into military and services, also corporate gain form contracts in new colonies.

But perhaps it could be that next time markets will shoot up, as more terror attacks mean more war and more profits for corporate!!! You never know!



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