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Siebert sat down with Advanced Trading Editor-in-Chief Kerry Massaro to discuss Wall Street Then and Now. Below is Part 2 of the Q&A. Part 1 of the interview was published on Advancedtrading.com last week.
AT: What's changed since you began working on Wall Street?
MS: The markets have gone through tremendous changes. One of the reasons the stocks go down so fast is the lack of specialists. When we had specialists, they had an obligation to maintain an orderly market and employ their own capital.
When I started in this business, if you wanted to open a $39 stock up or down a quarter of a point, you couldn't do it without getting permission from the floor governor.
The electronic trading has no rules. It's a bid-and-ask forum. No capital has to be employed to make up for a temporary imbalance. There is no capital required. We have what I believe is a free market, but maybe these markets are becoming too free.
AT: In your eyes, was there was more transparency on the trading floor then?
MS: The reality is there was a transparency on the floor. You could stand at that post and see who was bidding for the stock if they sent the broker in to trade. You could see the size of the bid when they did the cross. You knew if the cross cleaned up all the supply. We had a transparency. We have none of that now. We need to figure out how we can get some transparency in without destroying the free market.
AT: What else has changed?
MS: It's a totally different place totally different. Wall Street at that time had a floor that was vibrant, and that's where the action was. Today the floor is basically a relic. And it's a shame because no one has replaced that function.
AT: As a central place for trading?
MS: Where people could see it. If you were a member, you could put your badge on and go down to the floor — you could go down to the floor and see the action. You would get a feeling because you could see the bid and the ask. And you would know the guy had a lot more in his pocket to buy. There was an openness.
AT: But was that "openness" for the club of people who belonged to Wall Street? Did individuals have access? Now individuals have access because of the Internet and electronic trading
MS: Well, yeah. But a lot of the access has come since — not necessarily because the floor is going away. We didn't have different magazines like yours that go into different specialty subjects. But that's changed.
AT: Has anything else changed?
MS: We didn't have the degree of rumor mills. I heard the Bear rumor that day [before Bear was sold to JPMorgan]. I can't even tell you who I heard it from. But I called up Ace Greenberg and said, "Ace, I don't have a big checkbook, but if I can do anything to help you, call me." — because I used to clear through them at one time.
AT: Did he call you back?
MS:Oh, yes — he always calls me back within two or three minutes. I talked to him three or four times. I also called him the next week to say, "If you're laying off any good women I could use in capital markets, let me know."
AT: Any other major changes?
MS:The speed at which things happen is much different, and the markets are global today. One thing I am firm on is that we need to have global regulations in the capital markets. If I were a regulator, I would get on a plane and find out all the complaints in the different countries to try to get some global regulations.
AT: What did you focus on as an analyst?
MS:I was a research analyst given airlines and television motion pictures, but I concentrated on the aviation layer.
