As most of you probably know, John Thain brushed off the claims of a Goldman analyst today that Reg NMS will “erode the transatlantic stock exchange group’s market share and benefit its main US rival, the Nasdaq.” Tossed them to the wind; knocked them down; scoffed; said, “Whatchu talkin’ about, Willis?” Now, these responses make sense if you’re going to buy the party line that the New York Stock Exchange is, as they say, in compliance with the group of rules known as the Regulation National Market System, and believe the Goldman analyst, Joshua Carter, to be on the right track.
But, as John Francis Carney III has pointed out (like the crazy homeless man who shouts at you when you walk into your building every day) in the past, there’s a good chance that the NYSE isn’t in compliance with Reg NMS. Yes, JFC3 has said, these rules that allegedly help rather than hurt the NYSE—excuse us, NYSE Euronext—are not even being followed by the small elves that push buttons on the corner of Broad and Wall. Or, at the very least, we cannot get any firm confirmation from the NYSE or the SEC that NYSE is in compliance. But why would that be? Why would just John Thain allow this to happen? And why did Erin Burnett show up to the set today walking with a limp? The answers* may surprise you.
We submit that the reason the NYSE (i.e. JOHN THAIN) is not in compliance with Reg NMS may be because the new regulations would not give the Nasdaq an edge. This might be a bit of a stretch--after all the Nasdaq and the NYSE are supposed to be mortal enemies, or at least competitors. But since we cannot get straight answers from anyone about this Are They or Aren't They compliance issue, we're starting to entertain even the wildest, most-out there theories.
So. Here goes. The ultimate, reverse jujitsu, implausible theory. What if John Thain has a covert, vested interested in giving the Nasdaq all the edges that it can get? Why would NYSE's CEO care about helping the NASDAQ? When all reasonable, plausible explanations fail, its time to look at the unreasonable, implausible ones. And here's what we came up with. Perhaps John Thain decided a long time ago that he was going to retire a rich man and decided that he would get rich through Nasdaq day trading. He wouldn’t give a damn about the NYSE—he’s in it for himself!
Crazy? Or is it so sane that it just blew your mind? Impossible? Or is it so possible that your head is spinning like a top? Can’t it be? Or can it, and your entire world is just crashing down all around you?
NYSE chief rejects competition claims [FT via MSNBC]
Earlier: NYSE And REG NMS: The Mystery Continues