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Page 162
Adam Smith spoke of the invisible hand that guides a perfect market. A market is millions of people pursuing their own self-perceived, economic best interests. In a perfect world a perfect market has equal knowledge for all, transparency of best price in all competing markets, and universal, affordable access to the marketplace. That description begins to sound, look, and feel like DAET. A perfect Nasdaq market did not exist because the NASD Trading Committee had deliberately enacted rules and regulations designed to benefit the industry participants to the detriment of the individual investor and trader. The Trading Committee of the NASD was, of course, composed primarily of major market-making firms.
The SEC and the Department of Justice investigations into trading on Nasdaq confirmed that the perfect securities market did not exist. Even in an open outcry market like the futures pit and various commodity markets, the open outcry method of hollering bid and ask prices still allows friends to execute on behalf of each other instead of the public. If the "Solly" broker or the "Goldman" floor trader refuses to recognize a day trading floor broker of the exchange, there is no way for that day trader to trade with the major players. Personal relationships can be dominant in the transaction of any exchange's business unless trading is done impersonally as in DAET/SOES, where buyer and seller only meet on a computer screenpreferably anonymously. The scandals from the commodity pits are too numerous to relate. After trying to corner the silver market, the Hunt brothers learned that bankruptcy isn't all fun and games and sitting around the campfire singing old cowboy and oil dredging songs.
It is very disconcerting to me that we are entering the twenty-first century and major exchanges still allow people to run around yelling at each other or hold scraps of papers in their hands in an antiquated manner hundreds of years old. Paper can get lost or be misread, and open outcry can lead to confusion. I once had an uncle who was severely injured while lugging the stupid end of a piano up a flight of stairs. He shouted to the man on the top end, "Heave ho!" The man on the higher stair thought my uncle said, "Leave go." Period.

 
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